Export of solar PV products skyrocket

           

Ashish Khanna became the new director general of the international solar Alliance (ISA)

• The 7th season of the international solar Alliance (ISA)assembly took place in New Delhi.

• India and France have been Re-elected as president and Co president of the ISA.

India will hold the presidency until 2026.

•ISA focuses on promoting solar energy globally addressing common challenges faced by member countries.

•With 120 member and signatory countries, ISA aims to mobilize $ trillion in solar energy investments by 2030.

•ISA was launched by the Prime Minister of India and the president of France at the 2015 United Nation climate change conference in Paris.

•ISA became the first international intergovernmental organization headquartered in India. 

Source: KGS

• Shipments up 23 times to $2 bn in FY22-FY24 
• Temporary stagnation in domestic demand for PV modules a reason for the surge in exports
• Rising demand for Indian PV products abroad, attractive incentive structure also pushed Indian makers to establish facilities
• US a key market for Indian solar PV products, accounting for 97% of shipments in FY23 and FY24

Solar Photovoltaic (PV) products soared 23 times between FY22 and FY24, when it touched $2 billion, and continuous to grow at scorching pace, The trend signals that the country is poised to be a net exporter of these products, even as it is eying big targets for solar capacity addition, and these products are meant to be in great demand locally.

According to industry source, apart from the availability of booming market in the US, robust growth in exports of PV items can also be attributed to temporary stagnation in domestic demand for PV modules owing to the delay in the implementation of the Approved List of Modules and Manufacturers have ended up looking to sell their products at a high premium abroad.

The US has emerged as a key market for Indian solar PV products, accounting for 97% of shipments in both FY23 and FY24.

But the short-term focus on exports, while leaving the domestic market high and dry, may also have some benefits according to analysts.

"Focusing on the US market can benefit the Indian PV manufacturing ecosystem. The exposure to the US market will enable Indian PV manufacturers to attain economies of scale, ultimately enhancing their product quality and competitiveness," said Vibhuti Garg,director-South Asia, Institute for Energy Economics and Financial Analysis (IEEFA).

However, she cautioned that to truly establish India as a global manufacturing hub for solar products in the long run, Indian PV manufacturers must focus on upstream backward integration.

This will help India maintain its foothold in existing markets like Europe, Africa, Latin America, etc. she added.

With the US move to withdraw duty-free access to PV products from Southeast Asian countries, and even impose countervailing duties on them, India can potentially replace these countries to become the leading PV exporting country to the US, Garg added.

The increasing demand for India PV products  abroad and the attractive incentive structure under the Inflation Reduction Act (IRA) America also pushed many Indian manufacturers to establish manufacturing facilities overseas, particularly in the United States of America.

Some prominent players are Waaree Energy, Vikram Solar, Saatvik Energy and Navitas Solar.

Waaree Energies is setting up a 5 GW per annum integrated PV cell and module manufacturing capacity in Taxas, US.

The first phase of 3 GW is expected to be commissioned by the end of 2024.

Vikram Solar has also announced a 4 GW PV module manufacturing facility in Colorado, which will be commissioned by the end of 2024.

Saatvik Energy, Navitas Solar, and Premiere Energies have announced that they will set up three units of 1.5 GW, 1.2 GW and 1 GW of PV module manufacturing capacity in the US.

However, analysts also note that it is important for the country to balance need of a growing export market with domestic availability, given the government's focus on increasing the share of renewable energy to 500 GW by 2030 and schemes like PM Suryaghar that mandate the use of domestic modules.

"During the period of domestic supply shortage, certain distributed renewable energy segments, such as residential rooftop solar, could be affected due to their smaller order sizes, " according to Jyoti Gulia, founder, JMK Research.

"This can make it difficult for developers to secure enough supplies to execute their projects.

The supply-demand gap also affects solar module prices, which is critical factor for the price-sensitive residential rooftop solar segment."

As per the report, the country's annual solar module production is likely to grow to 28 GW in FY25 and 35 GW in FY26.

"After accounting for exports, the resultant supply by Indian PV manufacturers in the next two years will be only 21 GW and 25 GW, respectively, which is less than the requirement of approximately 30 GW per annum to meet India's 2030 renewable energy target," said Prabhakar Sharma, Senior consultant, JMK Research.

(Source: FE)