Prime Minister Narendra Modi’s call to boost domestic manufacturing of solar energy equipment is expected to see streamlined efforts. According to officials in the know, the Government is examining a proposal for setting up a Renewable Energy Export Council.
The need for such a council follows the ambitious National Solar Mission targeting an indigenous manufacturing capacity of 4-5 GW by 2020.
According to data shared by the Ministry of New and Renewable Energy, India’s installed solar cell manufacturing capacity stood at 2,953 MW till December 2016.
According to industry watchers, nearly half of all solar equipment manufactured in the country gets exported. The reason for this export-oriented production is that solar power project developers prefer using equipment from China. China’s incentives make solar panels cheaper. The situation is different for wind energy as most of the equipment manufactured in India is used domestically.
Analysts say that most of the domestic solar gear manufacturers depend on the roof-top programme and the demand from smaller countries such as those in Africa, where the Chinese companies are not as focussed. The subsidy component and the requirement to use Indian modules in the solar programme provide some relief to domestic manufacturers.
Jasmeet Khurana, Associate Director – Consulting at clean energy advisory Bridge to India, said that the export promotion council can help the domestic industry compete with China. “The export council may ask for key things such as to be competitive in terms of the cost of debt and the cost of electricity… The government can also help through the Exim Bank to finance these clean energy projects,” he said.