What are we importing more in the Solar Sector: Solar PV panels or cells?

There is no denial of the fact that India depends a lot on other countries for its solar PV panel/ cell demand. And this can be quantified when we see the number of solar panels/cells imported by India: 75 crores in the last financial year (2019-20 till Feb 2020). Yes, you read it right! More than 75 crore solar cells/ panels were imported last year alone! This amounts to around INR 116 bn import for the country (with a share of just 0.37% of total import for India last year).

Let us first see the share of different countries in this import.

Other countries include countries like Sri Lanka, Hong Kong, Myanmar, Malaysia, Singapore, etc.

The above chart clearly indicates the big dependence of the country on China, Thailand and Vietnam. Import from China is still more than 50%, despite the imposition of safeguard duty on imports from the country since July 2018. [P.S. The safeguard duty in such imports will be ending next month and investigation on the same will be undertaken soon.] This clearly indicates that the impact of safeguard duty on import was less and the period of 2 years for duty imposition is small enough to give thrust to local manufacturing.

Moving forward to the main question: What are we importing more from these countries: Solar PV panels or cells?

As per analysis of the import data for solar PV panels in the country for last 2 years, the trend of import price for a quantity (in terms of INR per panel) can be seen in the graph below:

The analysis shows that the price of panels imported from major countries (contributing more than 98% of import in FY 2019-20) is less. This clearly indicates that we are importing cells mostly. An interesting thing to note is that the price of import from China has fallen from INR 350+ in 2018-19 to less than INR 240 in 2019-20, which clearly indicates that either there is a lot of import of solar cells or import of solar panels with less wattage in the last year. 

For the other countries, the import price is already in the range of INR 30-70 per quantity, which is itself an indication of import of cells mostly from these countries. (not panels)

The finding can be seen as significant considering that there is a recent trend of increasing wattage of solar PV panels (from 350 W to 500+W, a recent addition of 580W panel by Jinko Solar) in the world and most of such solar panels are being offered by Chinese manufacturers, which have huge manufacturing capacity at global level.

It is known that we have around 3 GW of solar PV cell manufacturing capacity in India and more than 10 GW of solar PV panel manufacturing capacity in the country. Hence, it is known that the country lags behind in terms of cell manufacturing and companies in India prefer to import cells from other countries and assemble them in India. It is worth to mention that India has no in-house manufacturing facility for ingot or wafers for solar PV cells.

This also means that we have a good assembling facility for solar cells in the country and can be easily integrated with any local manufacturing facility in future. However, for the longer sustainability of the solar sector in the country, we need to focus on manufacturing at this stage itself. This also jells up well with the recent slogan of “Vocal for Local”. This has to be done right from the initial stage of manufacturing: from mining, wafers, ingots to cells and finally panels. We need the sector companies to come forward and ask the government to allow silica mining in the first place to start manufacturing solar wafers in the country. For all this, we need to chalk out a strategic plan with a vision for at least 5 years and up to 15 years. We can start with moving from panel import to cell import and build up assembling units. Along with this, we can initiate mining and wafer manufacturing at a slow pace. Further, we can move away from cell import to complete manufacturing once we have gained required experience and R&D in the field. This needs to be planned with caution as the solar PV material research is going on at a good pace and if we lag behind, we might end up investing in older technology and face consequences in terms of stressed or bad investment. Only time will tell if we move towards self-sufficiency in solar panels or continue business-as-usual.

Note: All the import data used here is for FY 2019-20 (Till Feb) (Provisional).

 Author: Mr. Saumendra Aggarwal, Research Analyst, Kavim Energy Solutions Pvt. Ltd.