Chronic under-utilization in Indian PV manufacturing, study finds

India’s Ministry of New and Renewable Energy has released figures that show only 297 MW of the country’s 1.38 GW solar cell production capacity is currently under operation. The situation is only slightly better for the solar module sector.

India’s domestic solar cell production industry is running at little over 20 per cent capacity, according to figures published this week by the country’s Ministry of New and Renewable Energy (MNRE).

Although India can call upon 1.386 GW of solar cell production capacity, just 297 MW is currently being utilized, hinting at the chronic under-performance in Indian manufacturing that prompted last month’s proposal to introduce anti-dumping duties on US, Chinese, Malaysian and Taiwanese solar cells and modules.

India’s solar module production facilities are busier, operating at 1.304 GW from a total output capacity of 2.756 GW. However, this under-utilization is still a cause for consternation among Indian companies, many of which will be watching with interest to see whether calls by the power minister to scrap the proposed dumping tariffs will be heeded by the Ministry of Commerce and Finance.

Indosolar, ostensibly the country’s largest solar cell producer with 450 MW of installed capacity, has just 80 MW under operation to date, according to the MNRE. Moser Baer, with 200 MW cell production capacity, currently has zero MW under operation, and just 80 MW whirring at its 230 MW module production facility.

Some of the India’s smaller producers, however, are enjoying full utilization rates, such as Jupiter Solar (100 per cent of its 70 MW cell production capacity), Euro Multivision (100 per cent of 40 MW), and EMMVEE Photovoltaic Power, which is fully utilizing its 135 MW solar module facility.

TATA Solar, one of the country’s leading PV lights, enjoys full utilization rates at its module facilities (100 per cent of 200 MW), but is at less than half capacity at its 180 MW solar cell facility. The company announced last month that it would increase module production to full module capacity (60 per cent overall capacity at the company’s Bangalore plant) on the back of the then-government’s introduction of anti-dumping duties.

The current situation, however, looks grim for Waaree Energy, which has zero per cent of its 250 MW solar module production capacity currently under operation.

The anti-dumping argument

After years of severe price erosion in the global solar market, India’s domestic PV manufacturing industry has been decimated as foreign markets – chiefly in Europe – have turned to cheaper Chinese solar cells and modules.

Domestic content requirements, introduced to ward off such a scenario, are not currently applicable to state procurement of solar projects and, as such, domestic manufacturing efforts have been undercut by cheaper components from overseas.

These figures from the MNRE come a mere 24 hours after Power Minister Piyush Goyal said that India does not have “adequate manufacturing capacity to support the kind of thrust we want to give solar”, calling instead on the government to reconsider its decision to impose anti-dumping duties. At utilization rates of less than a quarter, Goyal’s critics – those who support the anti-dumping measures – have a pretty strong argument against his latest proposal.

However, the Indian Ministry of Commerce has recently been critical of the many domestic manufacturers’ export strategy, accusing a number of solar PV companies of overreaching in an effort to capitalize on selling their competitively priced products to foreign markets. When such a strategy largely failed, most manufacturers were saddled with huge, idle factories and crippling interest costs.

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