After Failing Thrice, India looks for Alternatives to Kick Start Domestic Solar Manufacturing

New Domestic Solar Manufacturing Plan – India

The Indian government has always made it a mission to support domestic manufacturing of solar products in the country. Though India has succeeded in installing massive amounts of solar energy, most of it is powered by imports from China as domestic manufacturers languish due to the insane competition by state backed Chinese solar giants such as Jinko Solar, Longi and others.

There is a lot of private interest and even capacity in some segments but the competitiveness is not there as the foreign players from China have huge economies of scale, massive state owned government backed financial power and better logistics. The Indian players on the other hand, are hampered by a lack of all these factors plus they have to deal with the red tape typical of the Indian industrial ecosystem. The Indian government keeps bringing in ad-hoc measures from time to time to push Indian domestic companies but they fall flat almost every time. This has resulted in imports of solar panels reaching more than 85% of the domestic demand with billions of dollars of panels being imported every year. The Indian companies have either become bankrupt (Moser Baer) or pygmies as compared to the Chinese companies which are reaching 10 GW scale which is more than the entire Indian annual demand.

The government in its typical ham handed manner brought a manufacturing linked solar capacity tender last year which failed due to its inherent stupidities such as a very low ceiling price for the solar project bids as well as numerous other flaws. Anyone with a modicum of common sense would have said that the tender by SECI would fail miserably. But the Indian bureaucrats in their arrogant 30,000 feet high towers continued with their merry ways. Now after three major changes and extensions of that tender, there has been no response to the tender. A year wasted and now the government is thinking of changing its strategy. As per unknown sources in the government, the tender will come out again but with manufacturing being de-linked from solar energy generation. There might be also be an element of financial aid for the manufacturing as per reports. However, the shape of that tender is yet unknown. Given the numerous failures of the government in the past, there is not much hope that this time this manufacturing promotion scheme will be any better.