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Why India needs to build Solar • Capabilities are built to compete effec-
Manufacturing Capacity tively in competitive global markets
India’s energy imports have risen sharply
Solar manufacturing • Strong ancillary industry is created
from USD 43 bn. in 2005-06 to USD 167 can also create direct • Clusters for knowledge and infrastruc-
bn. in 2013-14. In comparison India’s trade employment of more ture sharing are developed
deficit in 2013-14 was USD 139 bn (table 1). • Research institutions develop industry
Solar power is a strategic need for the than 50,000 in the next linkages and support innovation
country as solar power can potentially save 5 years assuming local
USD 20 billion in fossil fuel imports annu- Global Solar Manufacturing
ally by 2030 and domestic manufacturing
manufacturing captures Scenario
can save USD 42 billion in equipment im- 50% domestic market Globally, there are examples of countries pro-
ports by 2030. share and 10% global viding strategic support to solar energy also
In the absence of manufacturing, India supporting solar manufacturing (table 2).
will need to import USD 42 bn. of solar
market share • China has developed ‘solar champions’
equipment by 2030 corresponding to 100 in a systematic manner through massive
GW of installed capacity. subsidies, low interest loans, grants and
Solar manufacturing can also create di- easy access to land and utilities
rect employment of more than 50,000 supply to Japan or supply of gas by • Globally, manufacturing bases are be-
in the next 5 years assuming local manu- Russia to European nations) ing planned as integrated solar indus-
facturing captures 50% domestic market trial clusters with strong Government
share and 10% global market share. An- Why it is necessary for India to support a support (table 3).
other at least 125,000 indirect jobs will be strategic industry [Solar] at early state of
created in the supply chain the life cycle? Indian Solar Manufacturing
India may not be able to utilize its large • Economies of scale results in lower cost Industry
solar energy resources, if imports of solar and brand building India’s Manufacturing Policy recognizes
panels get impacted due to • Skilled manpower gets developed with solar manufacturing as an industry with
• Major exporters using their production passage of time ‘strategic importance’. However, the policy
for their domestic use. • Overall strategy for innovation and ex- is yet to have the intended effect:
• Sudden jump in prices in the future ports are developed at an early stage • 40% of the Indian solar cell manufac-
due to supply shortages (e.g.. Polysili- • Appreciation of industry and competi- turers have shut down with industry
con price jump in 2008) tive dynamics utilization at only 21%
• Dispute with major suppliers (as evi- • Large domestic market helps in ex- • The industry has suffered due to sud-
denced in case of China’s rare earth panding capacity den and sharp price declines due to
TABLE 1
In billion USD 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Coal 3 4 5 9 8 9 17 16 15
Crude Oil 39 48 68 77 80 100 140 144 143
LNG 1 1 2 3 2 3 7 8 9
TABLE 3
Low interest Loans Preferential
Support in Subsidized R&D Tax Anti-Dumping
Country and Capital Subsidies Domestic
Acquiring Land Utilities Support Breaks Duties
Guarantees Procurement
China Yes Yes Yes Yes Yes Yes Yes Yes
USA Yes Yes Yes - Yes Yes Yes Yes
Taiwan Yes Yes Yes Yes Yes Yes - -
Malaysia Yes Yes Yes Yes - -
Yes; but not
disbursed to any
India - - - - - - Yes
manufacturer till
date