India wants to increase domestic production of solar parts, become major exporter
  • India’s duties on cheap solar parts from China may slow transition to renewable energy. 
  • Duties are part of a wide range of government actions aimed at building domestic manufacturing. 
  • India’s push to increase domestic manufacturing of solar parts may enable the country to become a major exporter because it would have the latest technology. 

India’s push for renewable energy is falling behind because of the pandemic, but the country isn’t considering eliminating its tariffs on inexpensive solar parts from China. In fact, it’s extending them.

India’s goal of installing 100 gigawatts of solar power by the year 2022 is way behind, with only 36.8 GW of installed capacity as of March, according to Mercom India Research. While another 36.9 GW is in the pipeline, the research firm estimates that solar installations will total only about 5 GW this year because of delays caused by the pandemic.

Even so, India announced in June that it would impose duties of up to 25% on solar modules and a 15% tariff on cells from China and Chinese-controlled companies, with plans to increase them after one year. The duties are a continuation of taxes that were levied starting in 2018 that were aimed at protecting domestic manufacturers of solar parts.

“We should become self-reliant,” Subrahmanyam Pulipaka, CEO of the National Solar Energy Federation of India, told Karma in an interview. “Transitioning into renewable sources — this should not be done by losing your energy security.”

COVID-19’s disruptions highlighted just how much India’s solar industry depends on China for its parts. First-quarter installations were the lowest since 2016, plummeting 39% from a year earlier. The impact of the pandemic led Prime Minister Narendra Modi to even announce a national strategy in May called “Atmanirbhar Bharat,” or “Self-Reliant India,” that includes a wide range of government actions.

The strategy aims to “scale up India’s manufacturing capacity,” Payal Saxena, manager of strategy consulting at Gensol Engineering, said in written comments to Karma. She said one result is that key developers like ReNew Power are putting their own manufacturing lines in India.

Domestic production is needed because the solar industry is so heavily dependent on Chinese imports. In the fourth quarter of last year, 85% of all solar modules and cells were imported from China, according to Mercom India. About 5.5% come from Vietnam and 4% from Thailand, where the companies are mostly controlled by the Chinese.

“It’s a wise decision to transition to national manufacturing,” Pulipaka said. “We have to look to strengthen our domestic capabilities if we want to be a world role model.”

In fact, he said, India’s late start could give the country an edge in the world economy because manufacturers will be able to adopt the latest technology to make the top products, such as high-efficiency solar cells.

The government’s actions are already attracting the interest of international investors, he said. Investors want clarity, which is what the growth strategy provides.

Pulipaka, whose organization acts as a bridge between the industry and the government, says India’s solar-parts manufacturers could become top competitors in the global economy with the proper government incentives. 

“Since we are starting from scratch, we’re in a good position to lead the world,” Pulipaka said.