Is It Time We Have Larger Debate On Solar ‘Make in India’?
India added 4 GW solar capacities in 2016, the fastest pace till date. During 2017, the solar sector is likely to add close to 9 GW of capacity—taking its overall capacity to 18 GW, according to Mercom capital group. In a short span, the country has marked for itself, several accolades in the renewable energy sector, catching the eyes of global investors. We piped US to become second best as the most attractive renewable energy country in the world (EY Index 2017) and are headed to become the world’s fourth largest renewable consumer by 2030 (IRENA 2016 report).
Amongst the whole slew of achievements, an important question is raised- In the wake of pushing the solar generation capacity and the achievements of low tariffs, have we failed to effectively support our domestic manufacturing?
The anti dumping petition filed by the Indian Solar Manufacturers Association (ISMA) validates the argument and reflects upon the stress point of the domestic solar manufacturing in the country.
Data for thought- During FY17, India exported solar modules and cells worth $69 million and imported $3.2 billion. Compared to FY16, solar imports grew by 36 percent and exports declined by 60 percent.
Also Read:Rising Solar Trade Deficit: Should India Start Worrying?
Of the total imports, 88.1 percent came from China in FY17, this accounted for about 5.7 GW capacities of solar modules in the last fiscal.
This makes the clear case for anti dumping petition filed by the ISMA against solar imports from China, Taiwan and Malaysia with the Directorate General of Anti-Dumping (DGAD), Ministry of Trade and Commerce, requesting levy of interim duty on importers. The DGAD’s office confirmed the acceptance of petition and initiation of the anti-dumping proceedings. The investigation report has been submitted to the Ministry of Trade and Commerce, as per Mercom Capital Group.
Also Read:Anti Dumping Petition Report Filed By Indian Solar Manufacturers Association
“We are working on a war footing to take this through. The investigation results will be out soon - as a first step the embassies have been informed, so exact data can be collected regarding import figures. In less than two months the investigation might conclude.”
The filing of the petition comes in the wake of government’s failure to effectively support the domestic manufacturing. On the other hand, China is pumping in billions of dollars in subsidies and other support measures to scale up solar PV manufacturing and hence dominate the global market. The Chinese government has been strategically able to provide support for new technologies through programs like ‘Top Runner’ to encourage the industry to migrate to higher efficiency products and upgrade its solar PV roadmap.
Unable to match up the cheap Chinese solar modules dumped in India, the Indian domestic manufacturers are fighting the solar ‘Beijing’ factor and hence calling for protectionism measures.
On a larger scale, over reliance on a single country for a single product imports can endanger the whole prospect of the India’s renewable energy mission. There always lies a risk of disruption in global supply chain and maybe a change in the, say, Chinese government policy.
Domestic Content Requirement (DCR) however did provide the Indian manufacturers some sign of relief. The government mandated the solar power developers to use cells and modules manufactured in India, which went down in shambles recently with India losing the hearing filed by US against this protectionist policy.
The problems looming over the domestic manufacturers cannot be solved by a short term remedy. Bridge to India (BTI), a renewable energy market consultancy, argues that the protectionism will not solve the problems of Indian manufacturers.
“The manufacturing capacities of multiple Chinese companies like LDK, Suntech and Trina Solar are as high as 2GW per year as compared to the 215MW manufacturing capacity of Moser Baer, which is the highest in India. In today’s date and time it can be assumed that a capacity below 350MW-500MW is not competitive for mass market sales. Protectionism at this stage will not really help anyone, it will only be a hindrance to reducing the cost of solar power in the country,” argues BTI.
They add on to say that the Indian manufacturers need to think of scaling up manufacturing capacities to be competitive. Keeping this in mind, the government should also think of providing support through manufacturing incentives to scale up manufacturing capacities rather than adopting protectionist measures.
At the time when India’s solar capacity addition is at its peak level, with cheap Chinese imports playing a major role, protectionist measures like anti dumping might provide a short term relief to the local manufacturers, but may also hinder and mess with the long term goals of clean energy in the country. The government needs to look into true ‘Make in India’ for solar manufacturing, if it intends to achieve those targets.
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