Indian Solar exports skyrocket, fuelled by US market success

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Indian Solar exports skyrocket, fuelled by US market success

Indian Solar exports skyrocket, fuelled by US market success

Industry News
Oct 16,23

Between April and July 2023, India's solar cell and module exports surged to $628.38 million, marking a staggering 1,062% increase from the $54.04 million recorded in the same period of 2022.

Indian Solar exports skyrocket, fuelled by US market success

Between April and July 2023, India's solar cell and module exports surged to $628.38 million, marking a staggering 1,062% increase from the $54.04 million recorded in the same period of 2022, as per official government data. This substantial growth is primarily attributed to the flourishing US market, where Indian manufacturers have found success while Chinese competitors face trade barriers.

The thriving U.S. market, shielded from cheaper Chinese imports, has become a boon for Indian solar cell and module producers. Exports of modules accounted for $616.73 million, with standalone cells contributing $11.65 million to the total. Notably, the U.S. alone purchased modules worth $607.69 million, fuelling the windfall for Indian manufacturers.

This surge in exports has been particularly beneficial for Indian solar businesses, notably in the United States, where trade barriers have limited Chinese competitors. Hitesh Chamanlal Doshi, Chairman and Managing Director of Waree, a leading Indian solar module manufacturer, emphasised the significant contribution of the U.S. market to the industry's growth. He also highlighted the support received by module manufacturers in the domestic market, including Production Linked Incentives (PLI), 40% basic customs duty protection, and approval requirements from the Ministry of New and Renewable Energy through the 'Approved List of Models and Manufacturers (ALMM).'

However, this success has sparked concerns among Indian solar energy developers. They are burdened with an additional 8-9 cents per Watt-peak due to the basic customs duty, despite Indian manufacturers' limited sales within the country. Srivatsan Iyer, Global CEO of Hero Future Energies, criticised this situation, calling the basic customs duty a "perverse incentive."

Doshi acknowledged the trade barriers imposed by other nations, providing opportunities for non-Chinese manufacturers to export. He stressed the increasing demand for electricity in India, emphasising the potential of solar power to meet this demand. He suggested that the implementation of PLI could enhance domestic manufacturers' competitiveness and enable them to rival overseas counterparts in terms of costs.

Despite the surge in exports, India also witnessed a rise in imports of cells and modules, reaching $1.26 billion between April and July 2023, a 78.3% increase from the same period last year. Doshi expressed concerns that imports might reach $4 billion this year, significantly surpassing exports. He highlighted challenges related to the 40% duty on imported cells and modules from China, particularly when imports via Free Trade Agreement (FTA) countries circumvent the intended purpose of these duties.

As of August, India's solar installations totalled 72 GW, likely exceeding the 75 GW mark by now. The government plans to auction approximately 40 GW of solar and wind-solar hybrid capacity each year for the next five years, further shaping the country's renewable energy landscape.

Source: Business Line