Identifying the huge opportunity available in the Indian solar power market, Chinese cell and module manufacturer Longi Green Energy Technology has announced plans to set up a fabrication unit in India. Construction on the facility will likely begin by the year’s end.
Longi will set up solar cell and modules manufacturing facilities, each of 500 megawatts capacity, through its Indian subsidiary Lerri Solar Technology India. The unit will come up at Sri City, Andhra Pradesh in southern India.
Lerri Solar Technology India will invest Rs 1,500 crore on the manufacturing facility ($235 million) and employ around 1,000 people. The company will manufacture monocrystalline solar cells and modules with an aim to meet domestic Indian demand and export to other countries. This will be Longi’s second overseas manufacturing facility; a fabrication unit is already operational in Malaysia.
India has plans to set up 100 gigawatts of solar power capacity by March 2022 spread across solar power parks, utility-scale projects, and rooftop solar power systems. This represents a massive opportunity for domestic as well as foreign module manufacturers.
Indian manufacturing capacity lags the amount of solar power capacity likely to be added in the coming years. A record 5,526 megawatts of solar PV capacity was added in India during April 2016 and March 2017. In comparison, as of 31 December 2016, 6,913 megawatts of solar modules manufacturing capacity was installed in the country; of this only 76% (or 5,867 megawatts) capacity was operational.
Solar cells capacity is even lower at just 1,753 megawatts installed and 1,448 megawatts operational.
Industry watchers have repeatedly stated that India’s domestic solar cells and modules manufacturing capacity is insufficient to meet the rapidly growing demand from developers. This is somewhat proved by the capacity addition target set by the Ministry of New & Renewable Energy as well as what is expected by industry watchers.
The Ministry has set a target to set up 10,000 megawatts between April 2017 and March 2018. Ratings agency ICRA expects 7,500 megawatts of capacity to be added in the current financial year while the research firm Mercom Capital expects the same capacity to be added during the current calendar year.
Additionally, the Indian government has started anti-dumping investigations into Chinese solar imports. A 2013 government study had proposed to levy duties ranging from $0.11 to $0.81 per watt on modules imported from the US, China, Malaysia, and Chinese Taipei. Having a manufacturing facility in India will enable the company to circumvent any potential anti-dumping duties from not only India but also other countries including the EU and United States.