If someone asked you what is the country of origin when it comes to buying solar panels in India, what would you say?
If someone asked you what is the country of origin when it comes to buying solar panels in India, what would you say?
If your answer is China, you would have been right…last year. In the first half of 2022, India imported 9.8 GW of solar modules from China.
Hi! You are reading a premium article
If your answer is China, you would have been right…last year. In the first half of 2022, India imported 9.8 GW of solar modules from China.
But in the first half of this year, that figure fell to 2.3 GW, a reduction of 76%. During the same period, Chinese exports of solar panels increased by 3%. That’s according to a report from a solar industry think tank.
In fact, India was the only country to experience a decline in imports. Every other country on the planet, including Western countries, that installs solar panels uses imported Chinese equipment.
So why are Indians buying fewer Chinese solar panels?
To meet its commitment to the Paris Climate Treaty, India is undergoing a revolution in the solar industry. The domestic solar industry is thriving thanks to robust demand and government support. The government’s goal to establish a resilient national solar ecosystem is gaining momentum.
Let’s examine the reasons for this boom…
Increase in customs duties
In April 2022, the government imposed 40% customs duties on the import of solar modules and 25% customs duties on the import of solar cells.
This decision made imports expensive and therefore boosted the domestic manufacturing industry.
Industry experts say the trend toward self-sufficiency is now irreversible. It is only a matter of time before India no longer depends on China in the solar sector.
Approved List of Models and Manufacturers (ALMM)
The Ministry of New and Renewable Energy has a list of approved solar modules and manufacturers.
This ALMM was made compulsory at the same time as the increase in import duties. This gave a huge boost to Indian solar companies as they made it to the list. Chinese companies were not.
Recently, the government suspended the ALMM until March 2024 to avoid any mismatch between supply and demand.
Indian Suppliers for Indian Government Projects
The government has made it clear to PSUs, infrastructure developers, government contractors and subcontractors that if they are working on a government-funded solar project, then they must use modules and cells manufactured by companies of the ALMM.
Indian suppliers have thus established a dominant position in government-funded solar infrastructure projects.
Solar PLI diagram
The Government of India’s Production Linked Incentive (PLI) schemes have been successful.
These programs stimulated the domestic manufacturing industry and increased the sales volumes of local companies.
The aim of the PLI solar program is to create 48 GW of module manufacturing capacity in India over three years.
The project is being executed in phases. In the first phase, a capacity of 8,737 MW was allocated. A significant jump was seen in phase 2, where a capacity of 39,600 MW was allocated. The attributions of this phase could require investments of approximately ₹930 billion according to the media.
The government spent ₹185 billion on this PLI system. The 48 GW capacity envisaged under this project is expected to be commissioned by 2026.
Indian companies benefit from solar boom
Tata Power #1
Tata Power, a subsidiary of the Tata Group, has a wholly owned subsidiary called Tata Power Solar, which specializes in solar power services.
The Company manufactures solar modules, solar cells and other solar products, and provides EPC services for solar power projects.
Recently, the company announced plans to raise up to $425 million from the US Development Finance Corporation (DFC) for its solar cell and module manufacturing plant in Tamil Nadu.
The factory aims to produce high-power solar modules and cells and implement Industry 4.0 standards for smart manufacturing.
Tata Power aims to increase its clean energy capacity from 38% to 70% by 2030.
#2 Borosil Renewable Energy
Borosil Renewables is India’s first and only solar glass manufacturer.
The company spotted the opportunity in this segment quite early and commissioned its solar glass manufacturing plant in January 2010.
In the solar panel glass sector, Borosil meets 40% of the domestic demand of 650 tonnes of glass per day, with the remainder imported from China and Malaysia.
The company also exports almost 20% of its current solar panel glass capacity to Europe, focusing mainly on Germany, Spain, Portugal, Russia and Turkey.
The company invested ₹5 billion to more than double its capacity. It can now manufacture 1,000 tonnes of glass for solar panels per day. It aims to add an additional capacity of 1,100 tonnes per day by the end of 2025.
Borosil Renewables is expected to benefit from the government’s Solar Mission and Product Linked Incentive (PLI) Scheme.
#3 Sterling and Wilson Solar
Sterling and Wilson Solar is a global provider of comprehensive solar engineering, procurement and construction (EPC) solutions.
The Company provides EPC services primarily for large-scale solar power projects, with a focus on project design and engineering.
She also manages all aspects of project execution, from conceptualization to commissioning, including operation and maintenance (O&M) services.
It is currently expanding its renewable energy offering to include EPC solutions for hybrid energy power plants, energy storage and waste-to-energy.
#4 Websol energy system
Websol Energy System is a leading manufacturer of monocrystalline photovoltaic solar cells and modules in India. The company began operations as a fully export-oriented unit catering to Europe and the United States.
The company is renowned for its high-quality products ranging from 5W to 220W, aimed at homes as well as commercial and industrial institutions. It has been in business for over two decades.
Websol has invested in cutting-edge developments to manufacture world-class photovoltaic cells and solar modules at its state-of-the-art factory in Falta, SEZ. The facility includes a production capacity of 250 MW cells and 250 MW modules.
It has also invested in an R&D (research and development) team focused on maximizing equipment utilization and quality standards with the aim of customizing products.
Conclusion
India’s solar boom is at an inflection point.
Once the country’s solar ecosystem becomes self-sustaining, there will be no limits for these companies.
But it is important to understand that India is not there yet. We have a long way to go before we can rid ourselves of Chinese domination.
So keep these stocks on your watchlist and be ready to act when the right opportunity presents itself.
Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.
If someone asked you what is the country of origin when it comes to buying solar panels in India, what would you say?
If someone asked you what is the country of origin when it comes to buying solar panels in India, what would you say?
If your answer is China, you would have been right…last year. In the first half of 2022, India imported 9.8 GW of solar modules from China.
Hi! You are reading a premium article
If your answer is China, you would have been right…last year. In the first half of 2022, India imported 9.8 GW of solar modules from China.
But in the first half of this year, that figure fell to 2.3 GW, a reduction of 76%. During the same period, Chinese exports of solar panels increased by 3%. That’s according to a report from a solar industry think tank.
In fact, India was the only country to experience a decline in imports. Every other country on the planet, including Western countries, that installs solar panels uses imported Chinese equipment.
So why are Indians buying fewer Chinese solar panels?
To meet its commitment to the Paris Climate Treaty, India is undergoing a revolution in the solar industry. The domestic solar industry is thriving thanks to robust demand and government support. The government’s goal to establish a resilient national solar ecosystem is gaining momentum.
Let’s examine the reasons for this boom…
Increase in customs duties
In April 2022, the government imposed 40% customs duties on the import of solar modules and 25% customs duties on the import of solar cells.
This decision made imports expensive and therefore boosted the domestic manufacturing industry.
Industry experts say the trend toward self-sufficiency is now irreversible. It is only a matter of time before India no longer depends on China in the solar sector.
Approved List of Models and Manufacturers (ALMM)
The Ministry of New and Renewable Energy has a list of approved solar modules and manufacturers.
This ALMM was made compulsory at the same time as the increase in import duties. This gave a huge boost to Indian solar companies as they made it to the list. Chinese companies were not.
Recently, the government suspended the ALMM until March 2024 to avoid any mismatch between supply and demand.
Indian Suppliers for Indian Government Projects
The government has made it clear to PSUs, infrastructure developers, government contractors and subcontractors that if they are working on a government-funded solar project, then they must use modules and cells manufactured by companies of the ALMM.
Indian suppliers have thus established a dominant position in government-funded solar infrastructure projects.
Solar PLI diagram
The Government of India’s Production Linked Incentive (PLI) schemes have been successful.
These programs stimulated the domestic manufacturing industry and increased the sales volumes of local companies.
The aim of the PLI solar program is to create 48 GW of module manufacturing capacity in India over three years.
The project is being executed in phases. In the first phase, a capacity of 8,737 MW was allocated. A significant jump was seen in phase 2, where a capacity of 39,600 MW was allocated. The attributions of this phase could require investments of approximately ₹930 billion according to the media.
The government spent ₹185 billion on this PLI system. The 48 GW capacity envisaged under this project is expected to be commissioned by 2026.
Indian companies benefit from solar boom
Tata Power #1
Tata Power, a subsidiary of the Tata Group, has a wholly owned subsidiary called Tata Power Solar, which specializes in solar power services.
The Company manufactures solar modules, solar cells and other solar products, and provides EPC services for solar power projects.
Recently, the company announced plans to raise up to $425 million from the US Development Finance Corporation (DFC) for its solar cell and module manufacturing plant in Tamil Nadu.
The factory aims to produce high-power solar modules and cells and implement Industry 4.0 standards for smart manufacturing.
Tata Power aims to increase its clean energy capacity from 38% to 70% by 2030.
#2 Borosil Renewable Energy
Borosil Renewables is India’s first and only solar glass manufacturer.
The company spotted the opportunity in this segment quite early and commissioned its solar glass manufacturing plant in January 2010.
In the solar panel glass sector, Borosil meets 40% of the domestic demand of 650 tonnes of glass per day, with the remainder imported from China and Malaysia.
The company also exports almost 20% of its current solar panel glass capacity to Europe, focusing mainly on Germany, Spain, Portugal, Russia and Turkey.
The company invested ₹5 billion to more than double its capacity. It can now manufacture 1,000 tonnes of glass for solar panels per day. It aims to add an additional capacity of 1,100 tonnes per day by the end of 2025.
Borosil Renewables is expected to benefit from the government’s Solar Mission and Product Linked Incentive (PLI) Scheme.
#3 Sterling and Wilson Solar
Sterling and Wilson Solar is a global provider of comprehensive solar engineering, procurement and construction (EPC) solutions.
The Company provides EPC services primarily for large-scale solar power projects, with a focus on project design and engineering.
She also manages all aspects of project execution, from conceptualization to commissioning, including operation and maintenance (O&M) services.
It is currently expanding its renewable energy offering to include EPC solutions for hybrid energy power plants, energy storage and waste-to-energy.
#4 Websol energy system
Websol Energy System is a leading manufacturer of monocrystalline photovoltaic solar cells and modules in India. The company began operations as a fully export-oriented unit catering to Europe and the United States.
The company is renowned for its high-quality products ranging from 5W to 220W, aimed at homes as well as commercial and industrial institutions. It has been in business for over two decades.
Websol has invested in cutting-edge developments to manufacture world-class photovoltaic cells and solar modules at its state-of-the-art factory in Falta, SEZ. The facility includes a production capacity of 250 MW cells and 250 MW modules.
It has also invested in an R&D (research and development) team focused on maximizing equipment utilization and quality standards with the aim of customizing products.
Conclusion
India’s solar boom is at an inflection point.
Once the country’s solar ecosystem becomes self-sustaining, there will be no limits for these companies.
But it is important to understand that India is not there yet. We have a long way to go before we can rid ourselves of Chinese domination.
So keep these stocks on your watchlist and be ready to act when the right opportunity presents itself.
Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.
