India will install just below 1 GW of solar PV capacity in 2014 says global clean energy communications and consulting firm, Mercom Capital Group.
In its quarterly market update, the firm expect Indian solar installation volumes to echo the amounts added in 2012 and 2013, but are optimistic that the country can break free of the 1 GW ceiling next year.
The Indian solar market has been shaped by three major developments over the past few months. The national election in May installed a pro-solar Prime Minister in the form of Narendra Modi, which coincided with the release of draft guidelines for Phase II, Batch 2 of the Jawaharlal Nehru National Solar Mission (JNNSM).
However, these two prongs of positivity were undermined by the ongoing uncertainty caused by the anti-dumping case, which served to slow growth that had reached 500 MW in the first six months of the year.
On August 22, India's solar industry heaved a collective sigh of relief as the government let pass a deadline on the proposed imposition of anti-dumping duties on cells and modules made in the U.S., China, Taiwan and Malaysia. The government's silence is viewed by many in the industry, Mercom Capital included, as implicit agreement that no tariffs will be placed on foreign-manufactured solar cells and modules.
Good news for the industry, but the uncertainty the case created something Mercom Capital believe was entirely avoidable served to halt project development across the country. As procurement plans were also put on hold, the government failed to exude a pro-solar aura, with the Trade and Commerce Ministry pushing for the introduction of duties at the behest of India's manufacturers; on the other side of the coin, the Renewable Energy Ministry stood firmly against them. An unedifying standoff may have eventually yielded the right result for India's solar industry, but the damage wrought was one of a government appearing to be "out of touch" with India's citizens and businesses that still suffer regular power outages, says Mercom.
"Although the anti-dumping case affected short-term outlook on installation growth, the end result was good and the NDA administration was able to take decisive action, making a pragmatic ‘big picture' decision that will remove uncertainty and help put the solar industry back on track for sustainable, long-term growth," said Mercom Capital Group co-founder and CEO, Raj Prabhu.
According to Mercom sources, India's government has since assured domestic manufacturers that there will be an "adequate offtake" of their solar produce via government programs, employing domestic content requirements in lieu of anti-dumping duties.
As for the Indian export market, the picture appears healthy, with close to $270 million solar exports registered in the past financial year, which represents year-on-year growth of 153%. The European market was the largest customer base, snapping up Indian solar goods in the wake of the EU-China trade dispute, which made Chinese cells and modules more expensive to European buyers.
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