Solar cells & modules: China firms’ plan to make in India drags, but exports rise

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Over last three years, more than a dozen Chinese companies announced plans to establish solar cell and module manufacturing facilities in India. Till date, however, not a single Chinese company has established a manufacturing plant in India, even though their exports to India from their facilities in mainland China have been increasing rapidly.

The companies that had announced plans to establish manufacturing facilities in India include Hareon Solar, Golden Concord Holdings (GCL), Trina Solar, Longi Solar, J A Solar, Arctech Solar and Zhongli Talesun Solar. “None of the Chinese companies have established their solar manufacturing facilities in India yet. Trina Solar and Longi are known to be in the process of doing so,” Jasmeet Khurana, associate director at solar consultancy Bridge to India, told The Indian Express.

Dhruv Sharma, chief executive officer, Jupiter Solar, who is also the coordinator of the Indian Solar Manufacturers Association (ISMA), confirmed the same: “No Chinese company has established any facility as yet. In fact, as per my information, beyond the identification of land, nobody has done anything.” At the same time, the imports of solar cells and modules from China have been increasing progressively with every passing year.

On December 8, 2016, Piyush Goyal, Minister of State of Power, Coal, New and Renewable Energy and Mines (Independent Charge), told Lok Sabha that India’s total imports of solar and photovoltaic (PV) cells were worth $2.34 billion in 2015-16, out of which $1.96 billion was from China constituting 83.61 per cent of the total. In 2014-15, India imported solar and PV cells worth $0.82 billion — China constituted 73.49 per cent of these imports at $0.603 billion.

“Of the full national market, Indian companies have a share of less than 10 per cent. Chinese companies have the market share of about 85 per cent,” Sharma said. In the April-December 2016 period, India imported $1.84 billion worth of solar and PV cells.

None of the aforementioned Chinese companies responded to the queries sent by The Indian Express.

When asked as to why import is more viable for such Chinese companies than India-based manufacturing, Khurana said: “There is zero basic custom duty on import of solar cells and modules in India. Modules supplied from China are more cost competitive and hence take up a bulk of the market share.”

“Decision on manufacturing location is driven by economic viability and availability of supply chain and related eco-system. Chinese manufacturers have the option to expand production within China or explore new manufacturing capacity in other countries, including India. Scale, lower cost of electricity and financing, export incentives and availability of local supply chain means that a bulk of the expansion for large Chinese manufacturers in happening within China,” Khurana added.

Anand Kumar, Secretary, Ministry of New and Renewable Energy, did not respond to the queries of The Indian Express.

As India’s solar sector is seeing a huge growth, the country has been observing a massive demand for solar and PV cells as well as their modules. According to the commerce ministry, India imported 161.57 million and 216.49 million solar and PV cells in 2014-15 and 2015-16, respectively. In April to December period of 2016, India’s import of these cells increased to 238.71 million. “India is an important market for global solar demand and which is why some of the capacity expansion may move here. However, that will only happen if it makes economic sense. India needs to ensure that benefits under M-SIPS (Modified Special Incentive Package Scheme) and state industrial and electronics policies are passed through easily to attract such investments,” Khurana added.

Following are some of the announcements made by Chinese solar companies about establishing solar cell and/or module manufacturing facilities in India. The Indian Express spoke with the officials of the respective state governments, where these facilities have been planned, to find out these projects’ current status:

> In July 2015, Chinese solar and PV cell manufacturer Hareon Solar announced that it is planning to set up a manufacturing facility of 1 GW capacity in association with the Dalmia group. A joint venture company was formed called Hareon Dalmia Solar Private Limited (HDSPL), in which Hareon Solar and Dalmia group owned 80 per cent and 20 per cent, respectively. It was decided that this facility would be established at the industrial park of Andhra Pradesh Industrial Infrastructure Corporation (APIIC) in Atchutapuram, Vishakhapatnam at Andhra Pradesh.

According to a senior APIIC official, area of around 33 acres has been allotted to the HDSPL, however, no construction has begun at the site as yet. He added that the company has told them that construction would begin by October this year and the first phase would establish the capacity of 160 MW.

The HDSPL and the Andhra Pradesh’s energy department did not respond to the queries of The Indian Express.

> In January 2016, Subhash Chandra-led Essel Infraprojects and China-based Golden Concord Holdings (GCL) Consortium signed an Memorandum of Understanding (MoU) with Andhra Pradesh government for setting up an integrated solar equipment manufacturing facility in the state with an investment of $2 billion.

According to a senior Andhra Pradesh government official, this equipment manufacturing facility is being planned somewhere close to Tirupati, but no land has been purchased as yet.

Essel Infraprojects and the GCL did not respond to the queries of The Indian Express.

> In September 2015, Adani Enterprises and GCL announced that they have signed an agreement for cooperation in the energy sector which includes construction of an industrial park. The partnership sought to utilise GCL’s experience in constructing solar equipment, with the aim being the creation of a manufacturing facility in Mundra, where solar module, cell, polysilicon and wafers were planned to be produced.

According to a Gujarat government official, the GCL has not shown much interest in establishing this facility. Last year, Adani group established a solar cell and PV manufacturing facility of 1.2 GW capacity at Mundra on its own.

Gujarat government’s energy department, Adani group and the GCL did not respond to the queries of The Indian Express.

> In April 2016, Chhattisgarh’s Chief Minister Raman Singh, during his visit to China, signed an MoU with Chinese company Arctech Solar for manufacturing solar wafers and cells in the state.

According to a senior industry department official of Chhattisgarh, the company was expected to invest $400 million to establish this manufacturing facility. However, he added that the company has not even purchased any land as yet.

Chhattisgarh government’s energy department and Arctech Solar did not respond to the queries of The Indian Express.

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