Markets

Dialogues with overseas developers are underway for a larger supply of Indian modules, which will lead to a further jump in exports, especially to the U.S.”

Moreover, the exporters say they currently have a better value realization in the U.S. market than the Indian buyers.

Harsh Jain, Director at Citizen Solar, a Gujarat-based solar module manufacturer, said, “U.S. consumers are favoring India because we are the second-biggest manufacturer of solar modules. The domestic module manufacturers also have a marginal markup improvement when exporting to the U.S.”

Jain added that India would soon emerge as the preferred module supplier to the World Bank and International Monetary Fund (IMF) projects as they strive to increase renewables share in African and Latin American countries. Further, India could replace Chinese module suppliers in the European market going forward, which will open another avenue for Indian modules, he said.

Rising exports: a threat to domestic supply?

The exponential export growth is mainly due to the low-base effect, which means the numbers in terms of capacity are relatively small at about 400 – 500 MW in the previous quarter.

A module manufacturer said he doesn’t see exports disrupting domestic supply in the medium or long term.

“The manufacturing capacity is being built, and it will take time for the production to assume scale. However, a substantial amount of the current capacity has been booked for the exports market because of better value proposition in the U.S.,” the manufacturer said.

Moreover, the Indian manufacturers are positioned to ramp up capacity when domestic demand picks up, negating any fear of supply disruption for the developers.

“I don’t think there will be a shortage. Manufacturers who initially wanted to set up a 1 GW manufacturing unit are now planning 1.5 -2 GW capacity. Most developers are also not running at their total production capacity,” a manufacturer said. Additionally, many manufacturers installing new manufacturing lines with imported machinery are obligated to export a certain share of their production under the Export Promotion Capital Goods (EPCG) Program. This allows them to claim duty benefits under the plan. domestic availability because new manufacturing capacities are coming online rapidly to offset any outgo.”

An initial probe by the U.S. Department of Commerce found that Chinese solar manufacturers are evading antidumping and countervailing duties by assembling solar cells and modules in Southeast Asia before shipping them to the U.S. If proven guilty, it could have a significant impact on Chinese exports to the U.S., which could ultimately result in better prospects for Indian exports.

“There are no capital equipment manufacturers in India currently, so we have no choice but to import. We need domestic players in the area to achieve total self-reliance,” a manufacturer said.

Speaking to Mercom, a major solar project developer, said, “Developers are facing a problem with the pricing of Indian modules because they at part with Chinese modules including the BCD. But in terms of volume, higher exports haven’t made any dent on

The Inflation Reduction Act (IRA) and President Biden’s commitment toward growing a quintessentially “made in America” clean energy industry has spurred billions in investment from private companies in solar and other renewable sectors.

In its short-term energy outlook, the U.S. Energy Information Administration forecast that the solar capacity will grow by around 21 GW in 2022 and 25 GW in 2023.

Detailed solar import and export data by component types, suppliers, manufacturers, and developers are available in Mercom’s India Solar EXIM Tracker.