Indian solar imports grew 47% in first half of FY 2016, finds Mercom Capital


India’s reliance on imported solar PV modules and cells has grown 47% in the space of a year, according to new data analysis by Mercom Capital Group.

In the first half of the financial year (FY) 2016-17 (April to September), imports of solar cells and modules into India reached $949 million, which is a sizable increase on the same period last year. Exports, meanwhile, were up 12%, reaching a total value of $52 million.

Chinese companies strengthened their stranglehold on the Indian market, accounting for 87% – or $826 million – of imports, with Malaysia’s share of 7% ($69 million) the next largest, although the bulk of components shipped in from Malaysia will likely have been manufactured by companies headquartered in China.

Taiwan (3%), the U.S. (1%) and Singapore (1%) are the other chief sources of solar module and cell imports into India, Mercom Capital calculates.

Traffic the other way is still dominated by the U.K., which accounted for 36% of India’s solar exports, followed by Italy (9%), China (9%), Belgium (8%) and the U.S. (7%). However, as installation rates in the U.K. are expected to drop off severely in 2017 following a series of cuts to subsidy, demand is also likely to fall.

According to developers who spoke to Mercom, India needs to increase its manufacturing capacity if it is lower the average cost of domestically produced solar modules. Many leading Indian solar manufacturers are focused on exporting their modules due to the higher profit margins in foreign markets.

However, if India wishes to increase its share of domestic production as it works towards its 100 GW of solar by 2022 goal, massive scale up of manufacturing capability is required.

This is an expensive process, and the Indian government has recently begun introducing measures designed to make it more attractive to invest in capacity increases. Current domestic manufacturing capacity stands at around 6.5 GW for modules and 1.6 GW for cells, with utilization rates at around 82%.

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