Challenges: Solar Power in India

Summary:

Indian Solar Power industry is in deadlock situation.

Can’t import more cheap product from China and US – (Hampers local industry, as well as products are not reliable in long run.)
Vs
Could not manufacture a global standard solar cells and modules.

Details:

Government targets 20GW solar power – locally by 2020 in contrast to 700 MW as of last year. Though the costs of solar power have gone down from ` 18 to ` 7.50 during the recent years, it seems the target is too ambitious.

  • India has been flooded with Chinese panels. Chinese companies get cheap capital, subsidized power and free land for manufacturing these panels. While India these facilities are relatively less.
  • US solar power companies also are exporting thin-film solar panels to India at lower rates.  US banks offer low interest rates (3%) as compared to high rates in India.
  • However one point to be noted. Both Chinese panels and US panels that are been imported are of cheap quality as compared to other types of solar panels been used in developed countries.

Solar-Power-1

Hence the reduction of cost of solar power is not due to technological breakdown, but due to dumping cheap solar cells and modules.

  • US impose dumping duties up to 249% making cheap solar cells barely enter into US. EU also imposes provisional anti-dumping tariffs on Chinese solar panels.

But imposing these types of duties in India may result in increase in costs of solar power again. Also India too are facing challenges in terms of manufacturing quality solar cells and modules at par with global standards.

Reference: Economic Times, 9th Nov 2o13

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