Cheap Chinese imports set to salvage India’s solar power generators?
MUMBAI: A drop in prices of solar panels made in China is set to boost the green power generation industry in India, which is struggling to remain viable because of high input costs— though Indian manufacturers are unlikely to cheer.
The situation has been aggravated as many companies have already bid for projects at prices under ₹5 per unit, which is too low to cover production costs.
In 2016, prices of Chinese photovoltaic modules— the key component of a solar panel accounting for 60% of the total cost — have fallen 10%. The price fall has been attributed to low demand in China and continued trade restrictions by the European Union on imports from the country.
The depreciation of the Chinese yuan with respect to the rupee will also drive prices down for Indian importers.
“While this would make tariffs viable, I don’ t think prices( cost of solar power) will fall any further,” said Sumant Sinha, promoter of RE New Energy.
Solar projects, which had been setup at aggressive bids of ₹4.60 to ₹4.70 per unit, had made projects unviable forcing companies such as US-based Sun Edison, to exit India.
“Solar cell prices going down will be a big positive for the solar industry in India,” said Sunil Rathi, director, sales and marketing, Waaree Energies, a provider of solar energy solutions.
“A 5-10% drop in module prices means 15-20 paise impact on solar prices in terms of rupees per kWh. So, for some of the aggressive bidders, it gives them that little bit of a cushion. It will help some of these projects move forward, get financing etc,” said Santosh Kamath, partner, KPMG in India.
But Chinese imports in the sector have faced opposition from Indian manufacturers, who have demanded the imposition of anti-dumping duty on cheap photo voltaic cells produced by China, which is world’ s largest manufacturer of the product.
India is likely to become the fourth largest solar market globally in 2016, with an estimated new capacity addition of about 5.4 G W( gigawatt ), according to renewable energy consultancy Bridge to India. The Narendra Modi government has set a solar power target of 100GW by 2022.