You are on page 1of 3

“SUPER PROJECT”

Abstract
“We should not get into the mindset that Renewable Energy is the intruder and conventional
energy is the main player. Why not consider Renewable Energy to be main occupants of the
‘house’ and then work out the rest of the system around Renewable Energy, essentially,
because Renewable Energy is the future?” — Former Member (Energy), erstwhile Planning
Commission of India
Recent estimates, as per NITI Aayog report, indicate that India’s solar potential is greater than
10,000 GW. India is in the process to achieve one of the most ambitious solar targets globally –
100 GW by the year 2022. The latest data from the Ministry of New and Renewable Energy tells
an impressive story that solar energy capacity has gone up from 2.63 GW in 2014 to more than
25 GW currently, a nine-fold increase. Undaunted, the ministry is busy rolling out new schemes,
some in the advanced stages of being launched. Like the Rs 1.4 lakh-crore Kisan Urja Suraksha
evam Utthaan Mahaabhiyan (KUSUM) scheme that is aimed at harnessing solar power for rural
India. In addition, a new scheme for deployment of rooftop solar power in the country called
Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI) is being
formulated.
However, with such a major thrust by the Government on the solar sector, the question arises
whether creating demand only makes India a solar hub? The answer, we believe, is ‘No’. The
solar mission can only be successful if the domestic manufacturing sector is also developed.
Creation of a strong and secure supply chain in India for the solar sector will enable creation of
jobs, reduce foreign exchange outflow and lead to increase in investments and sustainable
growth of the sector in the long run. However, Currently the solar module manufacturing
capacity is around 8 GW annually with operational capacity of around 5-6 GW and the solar cell
manufacturing capacity is around 2.5 GW, as against demand of 20 GW annually leading
to import of remainder quantity.
Global competitors from countries like China, US, Korea and Canada have significant price
advantage over domestic photovoltaic equipment industry as they have witnessed decade long
industrial growth combined with factors like lower interest costs, higher incentives or subsidies
leading to overproduction and economies of scale. All above mentioned factors has led
to importing 85-90 percent of the solar module installations are from China and such high
volumes of imports lead to a forex outflow of approximately INR 20,000 Crore or USD 3
Billion. If unchecked, this is expected to increase to USD 20 Billion by the year 2025, which will
be an opposite result of the Government’s objective of reducing import bills. As per
estimates, reducing reliance on imported products by mere 20 percent can lead to
reduction in forex outflow of 4,000-6,000 Crore and additional 5000 jobs creation every year.
There is a strong need to incentivize investments in creating the domestic supply chain with help
from both domestic and global players, and to facilitate collaborative believes that the creation
of a strong and secure supply chain in India for the solar sector will not just help India to foray
into mega solar based power projects but also an infinite pool of other opportunities will open
up in segments like solar energy based consumer products owing to the enhanced research and
development efforts. Further, Introducing solar manufacturing in National Skill

Page 2 of 3
Development Mission training plans can help in creating skilled workforce, strengthening Indian
solar industry and its employment rate significantly Support to large scale projects and
fully integrated manufacturing plants can also be effective additions to the ‘Make in India’
policies in the future in order to drive our service based economy towards manufacturing based.
This paper attempts to provide a pragmatic and rational approach to optimize the impact. In this
paper, there is an attempt to identify the present status of the supply chain, its key
elements along with key issues combined with benchmarking compared to global peers, level
playing challenges and then suggesting strategic measures to ensure a secured, sustainable,
robust and cost effective manufacturing base for the solar manufacturing industry in the
country with focus on employment generation, reducing foreign exchange outgo, reducing
climate change impact, and enhancing energy security.
The paper also attempts to explore the business potential of innovative solar energy
based consumer solutions such as solar based pumps, refrigerators which will help the
domestic based companies to diversify their product ranges, along with integration of various
industries, leading to make India a ‘Solar Hub’ in true most sense.

Page 3 of 3

You might also like