Interaction – Rajendra Kumar Parakh
Power Insight: Your views on growth of module market in India and challenges faced during the past year? What are your expectations from the market during current financial year 2019-20?
Rajendra Parakh: 2018 was not the best performing year for Indian solar power sector. Solar installation rate declined due to record low tariffs, reverse bidding and confusion regarding GST and safeguard duties.
Although, the country installed nearly 8 GW of solar capacity in 2018, nearly 90% of the PV modules used were imported from suppliers like China. Even after introducing 25% safeguard duty, the imported module prices emerged cheaper than that of domestically manufactured PV panels. On the other hand, the duty imposed on SEZ based solar units in India made domestic modules costlier, reducing their market demand further.
With the continuous import of solar modules, the issue of quality also continued to surface putting the reliability of solar energy under question. Indian PV industry has witnessed nearly 90% fall in module costs from 2006 to 2018, although it has been hailed as a symbol of success of solar proliferation across the world, paired with quality issues (of imported modules) and lack of project financing solutions have resulted into decline in solar installation and dealt damage to the Indian PV industry.
In 2019, renewable energy in India is expected to add nearly 15 GW capacity, out of which most is expected to come from solar. The Government of India is focusing on rooftop solar power growth (expected to be ~40% higher than 2018), increasing floating solar projects (80 MW of new floating solar capacity addition within 2019 is expected), solar parks getting operational, and leading states in India (Rajasthan, Andhra Pradesh, Tamil Nadu) promising to increasing their solar adoption levels indicate a bright future for solar in the country.
With Modi led Government returning to power, we are hopeful of seeing new opportunities while getting solutions for issues like- safeguard duties, transmission issues, lack of flexible financing etc.
Power Insight: As compared to global trends, how the market in India has its take for mono-crystalline technology over the more common multi-crystalline? Do you see an increasing adoption of mono-crystalline panels from here on in the Indian PV market?
Rajendra Parakh: Poly crystalline panels have a long proven history thus still are a large part of India’s module mix. As far as Mono is concern, the recent trend has shown a substantial increase in its market share in India and abroad. With Mono being high-efficiency module, it has many advantages over its counterpart- from having better space utilization to longest solar panel life and from better efficiency to having superior heat tolerance.
Additionally, with advanced process technology like PERC, Monocrystalline modules have increased its efficiency up to 22% in cell level.
With major markets now interested in Monocrystalline solar panels, we see the Mono PERC becoming a mainstream product in the next 1-2 years. Moreover, recent market trend show a rapid decline in Polycrystalline module market share, and the demand for new module technologies like bifacial and half cut modules have risen by folds.
Keeping that in mind, large scale solar project developers are still persisting with Polycrystalline silicon. However, with rooftop and residential market, we see a change in demand to monocrystalline modules; this increase is mainly due to its superior space utilization and aesthetic. Further, we are observing a shift from 1000 to 1500 system voltage in the past years.
Power Insight: What has been the impact of safeguard duty on Indian PV market during the past year?
Rajendra Parakh: In an ideal scenario, 25% safeguard duty (20% now) on the solar module and cell imports (mainly modules) would have helped the industry and the domestic manufacturing sector by creating demand. But as the duty targeted domestic solar manufacturing units within the special economic zones (SEZ) as well, it did more harm to the domestic industry than good.
Imposing 25% safeguard duty on SEZ based domestic solar manufacturing units have increased solar module production charges and pushed domestic manufacturers in India out of business. The duty has brought the issue of job losses, as the demand for domestically manufactured modules and cells fall.
As a domestic solar module manufacturer, the majority of our solar cells came from China (as Indian solar cell manufacturing capacity is low). Therefore, the imposition of Safeguard duty on the cells and modules manufactured in SEZ (India) have made thriving in the market very challenging. It has also raised the project costs by 25%, which has adversely affected project growth within the country.
On the other hand, safeguard duties have failed to stop the imported solar equipment influx within the country, as even after paying safeguard duties, the imported solar equipment is cheaper than domestically manufactured solar equipment.
For projects, which were auctioned before the implementation of Safeguard Duty, developers are inclined to buy imported solar modules as they can pass on the cost of duty to end of consumers, under a change in law clause only if the modules are imported.
Also for the projects, which were auctioned out after the implementation of SGD, procurement would be done in the second half of 2019. So the SGD didn’t yield any positive results for the domestic manufacturers.
We are hopeful that the new Government will make modifications to the policies and solve this issue, prioritizing domestic manufacturing in solar, which can promise industrial and economic progress.
