The India Series – Solar Perspectives for India

Like the global PV market, the solar market in India is currently dominated by poly and mono Silicon PV [1].  Over the last decade, the average panel cost has crashed due to volumes of scale, while panel efficiency has increased steadily due to improved silicon solar technologies [2]. The use of high-efficiency monocrystalline silicon technology has improved the cost-effectiveness of solar projects by increasing the energy input per module and reducing land, and other balance of system (BoS) costs, resulting in higher returns [3]. Globally, the shift from poly to mono solar panels has already been in place for much longer. Due to its price-sensitive nature, the Indian market has been slow to adopt the technology, with mono PERC modules being 15-20% more expensive than polycrystalline [3]. However, with technological improvements and increasing production volume, the price difference between the two is expected to diminish further, so the share of monocrystalline modules deployed will rise in India as well. 

While module production in the country has grown tremendously, very few companies manufacture cells. In India, as of 2019, the installed manufacturing capacity of cells was about 3.1GW (comprising 18 companies), and that of the modules is about 11GW (comprising nearly 175 companies) [4]. Setting up a silicon cell manufacturing plant comes with the baggage of huge capital and operational expenditure, making financing a challenge. As of 2016, the minimum entry bar in terms of plant capacity and investment for module manufacturing was 120 MW and USD 8-12 million, respectively. For cell manufacturing, it was much higher – about 400 MW and USD 100-130 million [5]. This explains the considerably higher number of module manufacturers, as there is more opportunity in the module market than the cell market.

The government didn’t recognize existing PV manufacturing infrastructure as sufficient for India’s independent energy transition, as the current production capacity is only able to meet around 35% of the annual domestic demand. What is more, the share of Indian PV module sales compared to overall global sales is so far insignificant [6]. Internal policies for PV industry development notice that while there are only a couple of GW scale companies, such as Vikram Solar, Waree, or Tata Power Solar, most of the plants are of 50-200MW capacity, having very high operating costs. As pointed out earlier, India also has a limited number of solar cell manufacturers. It may be difficult for India to compete with very cheap PV products from China or Taiwan. With stiff competition from manufacturers the world over, margins are low, inhibiting expansion. 

Without credible PV manufacturing capacity, import dependence in India can move from oil to solar panels. Indian PV manufacturing infrastructure needs to grow in scale to improve its cost competitiveness and meet the internal demand. Expanding local silicon PV production will surely need various forms of government support, such as e.g., intense public investments or reduced tariffs. 

Another approach could be finding and developing a cheaper PV technology that would change the scale of required investments. At the moment, there is no strong competition for silicon PV for large-scale installations. Most emerging and thin-film technologies are either not cost-competitive (e.g., CIGS) or optimal for different light conditions, like low light (e.g., organic PV).  But there is hope that within a few years, one of the novel PV technologies matures enough to offer a promising alternative.

Perovskite PV has a very high theoretical cell efficiency and an excellent performance in both natural and artificial light. The thickness of a perovskite solar cell is under one micron and can be manufactured at low temperatures with cheap technologies, such as printing. This can be a gamechanger in the PV industry, as today, the production of silicon solar cells is the most cost- and energy-intensive stage of manufacturing. With groundbreaking research in labs worldwide over the past decade to improve efficiency, stability, and scalability, perovskite solar cells can become a significant market player in India and globally already this decade.

References

[1]https://www.ise.fraunhofer.de/content/dam/ise/de/documents/publications/studies/Photovoltaics-Report.pdf

[2]https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/Nov/IRENA_Future_of_Solar_PV_2019.pdf

[3] https://mercomindia.com/mono-perc-modules-india/

[4] https://www.teriin.org/sites/default/files/2019-08/Solar%20PV%20Manufacturing%20in%20India.pdf

[5] https://www.seriius.org/pdfs/policy-mapping-study-201710-cstep.pdf

[6] https://indiaclimatedialogue.net/2021/01/27/is-india-ready-to-compete-china-in-solar-module-production/

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