In The Spotlight
Indian solar industry has scaled great heights surpassing 10 GW in 2017, from a meagre 10 MW in 2010. Even without huge industrial muscles that other countries keep on flexing, India braved all odds showing continued growth in the solar vertical. From 2015 to the beginning of 2017, Indian solar sector has successfully doubled its solar capacity (5GW in 2015- 10GW in 2017), earning commendations in the global podium and inspiring developing countries to venture ahead. Obviously, Hon’ble Prime minister Shri Narendra Modi created the urgency in the green energy shift by announcing development of 100 GW solar-installed capacity by 2022, which served as the ignition for upward growth that the Indian solar sector is displaying. And it is easy to understand that this much needed boost will bring numerous opportunities.
However, the obvious question surfacing from this equation is- ‘whether the opportunities will be for domestic manufacturers or not?’ The legitimacy or relevance of this question is absolute, since Indian solar reliance and the foundation of an energy rich future is closely tied to the improvement of domestic manufacturers (for details on how domestic manufacturing and Indian solar success is connected click here). Therefore, it is important to understand how this growth is shaping our future.
Understanding the Glitches
Subsidies and rebates on capital expenditures, additional one-time allowance, tax-free grants, and acceptance to foreign investments have helped domestic manufacturing to flourish in India. And continuous support from the Indian Government (through a plethora of policies) has led these initiatives into success. However, India is spending more in importing solar modules (USD 980 million) than gaining from exporting them (USD 50 million, Sept 2016). This is surprising since India wants to claim a sizable portion of the global solar market and kick back the profits (of exports) for socio-economic reform. Chinese module suppliers have increased their market share in Indian PV market to 75 per cent from 50 per cent last year. And recent market analysis reveals that 8 out of top 10 module suppliers in the Indian market are Chinese. All of this points towards growth devoid of domestic manufacturing progress, which is another way of saying ‘a sound yet unstable solar energy future for India’.
China can produce and sell solar modules at a price range cheaper by INR 5-6 per panel than domestic products (aggressive pricing is the main reason behind India importing Chinese modules), because of volume scale, cheap energy and access to low-cost capital. Additionally, the lack of a uniform quality control for solar modules in India makes it easier for China and other foreign suppliers to introduce low quality modules in our energy mix. Low quality imported modules will untimely add extra expenses in repair or replacement processes, slowing down ‘power for all’ initiatives and affect the trust on the green energy shift.
To ensure India’s vision of self-reliance besides reaching 100 GW target, Government should consider placing MIPs (minimum import price) on imported solar modules. Foreign solar players are selling their modules in India at a lower rate than their actual (global) price. And as India lacks a uniform quality assessment regulation, importers are finding it very easy to dump low quality modules in the market. This practice is recognized by the industry leaders as ‘e-waste dumping’. Having scale and Government subsidies, Chinese solar players can afford to sell their modules at a lower cost than domestic companies do; ultimately, curbing demand for domestic modules and shrinking Indian solar growth.
However, making sure that imported modules cannot be sold in the Indian market below a certain price limit, can bottleneck low quality product access in the country; and help domestic manufacturers to compete on a level playing field. We can look at EU’s MIP imposition on imported solar equipment for example. European Union has changed the MIPs from time to time, going back and forth from 0.56 Euro/Wp to 0.53 Euro/Wp to maintain a healthy demand for domestic manufacturers.
India uses MIPs to regulate the access of imported steel in its market, to safeguard the domestic manufacturers and sellers. Moreover, judging from domestic steel manufacturers’ recent request to Government for continuation of MIPs, we can speculate that it has benefited the industry. The same can be done for the solar industry, mirroring EU’s steps to utilize International trade and competition rules to create a standard quality for import modules and assuring a better future for nation’s solar industry.
Imposing MIP is just one of the many remedies that can help India’s internal solar growth to centralize industry within borderlines. Current growth has paved a path for a better future, but domestic manufacturing is needed to turn the possibilities into reality.
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Vancouver, Canada, Sept. 20, 2016 – Schneider Electric, the global specialist in energy management and automation, has announced Sustainable Development Technology Canada (SDTC) will fund the commercialization of its Smart Energy Storage Solution (SmartESS) inverter.
The contract with SDTC, an arm’s-length foundation of the Government of Canada, for the development of clean technologies solutions, will enable Schneider Electric to develop SmartESS inverter solutions in the T’Sou-ke First Nation, a native community located on the south shore of British Columbia’s Vancouver Island.
“T’Sou-ke Nation welcomes the opportunity to partner with Schneider Electric to continue to develop the role of solar power in bringing sustainable energy solutions to ‘on’ and ‘off-grid’ First Nation communities, as well as to our wider society,” said T’Sou-ke First Nation Chief, Gordon Planes.
The SmartESS platform is a transformerless, all-in-one, wall-mounted inverter combining a hybrid battery and solar photovoltaic (PV) inverter. This project will create a connected and integrated solution that provides increased performance, reliability, and simplicity at a cost lower than existing solutions. For this project, Schneider Electric, with consortium partner Rainforest Automation, will provide the cloud connectivity and energy management to the SmartESS to demonstrate it as part of project. It is ideal for T’Sou-ke First Nation because it has been designed to address the power and energy needs of residences, small commercial businesses, off-grid communities and energy service providers.
“The decentralization, decarbonization and digitization of our grid requires us to make greater investments in innovative solutions that can help meet the world’s energy challenge. We believe the development of our SmartESS inverter will be critical to advancing solar development in Canada and sustainability for future generations,” said Xavier Datin, Vice President of Solar Off-grid and Residential at Schneider Electric. “The grant from the SDTC will allow us to bring a reliable, powerful and environmentally safe energy solution to an area where it would otherwise not be available. Their commitment to spur the development and demonstration of innovative, clean technologies, such as the SmartESS solution, in these rural areas will benefit us all as global citizens.”
“Sustainable Development Technology Canada is very proud to support the commercialization of Schneider Electric’s innovative technology,” said Leah Lawrence, SDTC President and Chief Executive Officer. “This project will create green jobs for the local economy, increase efficiency in the sector and provide economic and environmental benefits for all Canadians.”
The grant builds on Schneider Electric’s commitment to driving innovation in the solar power industry and to developing sustainable energy solutions to ensure everyone around the globe has access to affordable, reliable and efficient energy. For more information about Schneider Electric’s innovative solar solutions, please visit www.solar.schneider-electric.com.
About Schneider Electric
Schneider Electric is the global specialist in energy management and automation. With revenues of ~€27 billion in FY2015, our 160,000+ employees serve customers in over 100 countries, helping them to manage their energy and process in ways that are safe, reliable, efficient and sustainable. From the simplest of switches to complex operational systems, our technology, software and services improve the way our customers manage and automate their operations. Our connected technologies reshape industries, transform cities and enrich lives. At Schneider Electric, we call this Life Is On.
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Sustainable Development Technology Canada (SDTC) is an arm’s-length foundation created by the Government of Canada to support innovative and entrepreneurial clean technology projects. Our portfolio of companies develop and demonstrate new technologies that address issues related to climate change, air quality, clean water and soil.
StrategicAmpersand Inc. (For Schneider Electric)
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Below are the excerpts of our recent interview with Mr. Rajnikanth Umakanthan, Managing Director, 3TIER India
Mercom Capital Group, llc, a global clean energy communications and consulting firm, forecasts global solar installations to reach 66.7 GW with China, the United States, Japan and India to make up the top four solar markets this year.
Click here to get the full report: http://bit.ly/MercomSolarApr2016Form
“Solar installations are forecasted to grow year-over-year globally despite recent headwinds in the sector with solar stocks, yieldcos, bankruptcies and the negative perception surrounding solar public companies. Solar has grown from just 2.6 GW in 2007 to a forecasted 66.7 GW in 2016 showing impressive resiliency along the way as it becomes one of the fastest growing new generation sources around the world,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
China installed 15.1 GW of solar in 2015, retaining its top spot as the largest solar installer in the world. Mercom forecasts China to install 18.5 GW in 2016. The additional 5.3 GW installation quota combined with the expected rush to meet FiT deadlines in the first half of the year should help China exceed 2015 installation numbers. China’s Q1 2016 installation figures of 7.14 GW confirm that it is off to a fast start. China recently reduced the FiT by up to 11 percent based on regions. To address the subsidy payment issues and raise additional revenue, the renewable energy surcharge has been increased by 27 percent, and an on-grid power tariff for commercial and industrial customers has been reduced to tackle shortages in the renewable energy fund. To address curtailment issues, the government has proposed a policy of guaranteed purchase of renewable power which it plans to implement gradually.
The unexpected extension of the U.S. Investment Tax Credit (ITC) in December last year has completely changed the dynamics of the U.S. solar market. Mercom forecasts a conservative 13.5 GW of solar installations in 2016 as vendors are indicating a slower first quarter - at least in terms of new projects - as developers are taking their time to line up suppliers and negotiate contracts. This of course may change in the second half of the year.
Japan is expected to install around 10.5 GW of solar this year. Its current solar installation goal is 28 GW by 2020. Japan cut the feed-in tariff in March of 2016 by 11 percent. While the country started off with an overly generous FiT in 2012 of ¥42 (~$0.387)/kWh, it is now down to ¥24 (~$0.221)/kWh. Japan continues to struggle with grid connection, curtailment issues, and an undeveloped pipeline. Of the approved pipeline, only about 15 percent has been installed. Japan is also looking to implement solar auctions in order to cut subsidy costs.
India is expected to install over 4 GW in 2016 which will bring it to the fourth spot globally. India currently has a pipeline of over 21 GW under development and in pending auctions as the country targets its installation goal of 100 GW by 2022. Aggressive bidding in its recent auctions has caused some concerns to the viability of these projects due to unrealistic low bids. The latest India update can be found here.
The top three solar markets in Europe are again expected to be the U.K., Germany and France.
Proliferation of solar auctions around the world is an important development over the last 12 months with subsidy costs from solar becoming an issue in many countries. Germany completed three auctions in 2015, the U.K. and Japan are looking at a similar model, France is conducting solar auctions, and China is also contemplating auctions. India and South African solar policies are primarily based on auctions while Brazil and Mexico are also largely auction-based.
Subscribers to Mercom’s weekly Solar Market Intelligence Report will have access to the full report. To become a subscriber, visit: https://secure.campaigner.com/CSB/Public/Form.aspx?fid=1120345
About Mercom Capital Group
Mercom Capital Group, llc, is a global communications and consulting firm focused exclusively on clean energy and financial communications. Mercom’s consulting division advises cleantech companies on new market entry, custom market intelligence and overall strategic decision making. Mercom’s consulting division also delivers highly respected industry market intelligence reports covering Solar Energy and Smart Grid. Our reports provide timely industry happenings and ahead-of-the-curve analysis specifically for C-level decision making. Mercom’s communications division helps clean energy companies and financial institutions build powerful relationships with media, analysts, government decision makers, local communities and strategic partners. For more information about Mercom Capital Group, visit: http://www.mercomcapital.com. To get a copy of Mercom’s popular market intelligence reports, visit: http://mercomcapital.com/market_intelligence.php.
Lightway solar (BaoDing Lightway Green Energy Technology Co., Ltd) is a LONGJITAIHE group company. Longjitaihe established in 1995, is a fortune 500 company of China.