Chinese imports fuelling India’s solar power boom

NEW DELHI: India might be witnessing a revolution in solar power and tariffs may have come down drastically, but China is fuelling it.

While 5 years ago the average solar power tariff was around `1718 per unit, it currently stands at a lowly `5-6. The main reason: A surge in cheap equipment from China, and a fall in their prices which are leading Indian power producers to place low bids. Sample this. Tariff bids announced last week for a little over 310 megawatt (MW) of solar power projects in Madhya Pradesh went as low as `5.05 per unit.

According to data compiled on the basis of the government’s import and export numbers, imports of of photovoltaic (PV) systems from China, a key component in solar power systems, surged more than 10 fold between 2010 and 2015.

While in 2010-11, India imported Chinese PV systems worth a little over `352 crore, the figure for 2014-15 was just under 3,745 crore. India had an installed solar capacity of around 1,000 megawatt (MW) in 2010-11 against the current 4,000 MW.

India’s current domestic production capacity for PV systems is just around 1,300 MW. While the central government’s Jawaharlal Nehru National Solar Mission had placed some domestic sourcing obligations on the bidders, the contracts being bid out by states have no such criteria. Moreover, in September, India had said that it would not impose any antidumping duty on solar imports from the US.

Chinese companies are essentially competing on quality as well as prices, said Shikhin Mehrotra, manager, consulting, Mercados EMI India.

“Preferences to top Chinese panels is given due to their lower prices as well as international reputation. Domestic manufactures have found it hard to compete with the sheer scale and vertical integration of Chinese module manufacturers,” Mehrotra said.

However, Germany seems to be giving China a run for its money at least in one department — electric inverters. “When it comes to electric inverters, the Germans are way ahead of the Chinese and are unlikely to compete with them in the near future,” Mehrotra said.

While in 2010-11 India imported ` 674 crore worth of electric inverters, the figure for 2014-15 was ` 1,151 crore. A country-wise break-up was not immediately available.