China’s new solar policy may delay India’s plan to make panels

An auction by state-owned Solar EnergyCorp. of India, to be held in September “can be delayed depending on global cues,” said JN Swain, managing director at SECI, when asked about the impact of China’s policy change, which is expected to cause oversupply and equipment prices to crash.The tender, issued last month, sought bids to set up 5 gigawatts of solar manufacturing facilities in the country. The winner would be permitted to build a generation project twice the factory’s capacity.

Bloomberg New Energy Finance expects expects module prices to drop 34 percent this year and a further 10 percent to 15 percent in 2019 after China cut financial support to developers and halted approval for new projects in June. The new forecast came on top of a May 22 report of an “intense glut” in solar modules supply by late 2018.

India stands to gain most from reduced equipment prices as the South Asian nation is the biggest customer of Chinese solar equipment.

The current Indian manufacturing policy, given high capital cost and corporate taxes, is not conducive for making products that are globally competitive, according to Sujoy Ghosh, country head for Indian unit of American module manufacturer First Solar Inc.

“Our biggest manufacturing investments are in Malaysia and Vietnam and none of these two have a huge domestic market,” Ghosh added.

India has an annual solar-cell manufacturing capacity of about 3 gigawatts while the average annual demand is 20 gigawatts, according to India’s Ministry of New & Renewable Energy. The shortfall is met by imported solar panels.