Local manufacturers now get a boost
In the past few decades, there’s been a move towards green energy across the world, like wind, hydroelectric, geothermal and solar energy. And India has huge potential to harness solar power.
According to a report from Allianz, India ranks as the third most attractive renewable energy market globally, alongside China and the United States. There are two reasons for this. One, India’s geographical location, which is ideal for year-round solar radiation. Most regions in the country receive 4kWh of solar radiation per square metre, which amounts to approximately 3000 hours of sunshine per year! And two, India’s energy mix which is 64% thermal (coal, oil and gas) and the need to transition to clean energy.
At present, India has tapped into less than 10% of its vast solar and wind capacity, but aims to generate 75% of its electricity from renewables by 2050.
Solar energy: India’s potential
According to the Ministry of New and Renewable Energy, India has abundant solar energy, receiving about 5,000 trillion kWh of energy annually, with most areas getting 4-7 kWh per square meter daily.
Solar power is highly scalable and can be used effectively across the country. It supports distributed power generation, allowing for quick expansion with shorter setup times. Off-grid solar applications are especially useful in rural areas, providing power, heating, and cooling for both rural and urban needs.
From an energy security perspective, solar is the most reliable source: just a small fraction of the available energy is sufficient to meet India’s entire power needs. The National Institute of Solar Energy (NISE) has estimated India’s solar potential at approximately 748 GW, based on the assumption that 3% of the country’s wasteland could be covered by solar photovoltaic (PV) modules. Solar PV modules, also known as solar panels, convert sunlight into electricity using interconnected solar cells.
As of the end of 2022, India ranked 5th globally in solar PV deployment, according to REN21’s Global Status Report 2023 and IRENA’s Renewable Capacity Statistics 2023. By June 30, 2023, the country’s installed solar power capacity had reached around 70.10 GW.
The pledge to switch to clean energy
As part of its Nationally Determined Contributions (NDCs) under the Paris Agreement, India has raised its non-fossil energy capacity target to 500 GW by 2030, up from 175 GW of renewable energy by 2022. The Union Ministry of Power states this aligns with the NDC commitment to achieve 50% non-fossil energy.
In a nutshell, India plans to have 50% of its energy infrastructure powered by “clean” sources by the end of the decade, aiming to reduce the current reliance on coal-based power plants. Solar power will play a key role to meet this target, but importing manufacturing materials from abroad has made it an expensive affair.
External dependence
India’s potential to harness solar power is impressive, but the industry has been heavily dependent on imports. A report from think-tank GTRI (Global Research Trade Initiative) stated that India’s annual solar equipment import bill was likely to touch $30 billion due the reliance on Chinese goods, including solar glass, which is an important component in the manufacture of solar panels.
A BloombergNEF report from late 2023 highlighted by the numbers, India’s solar imports from China. In September 2023, solar panel imports reached an 18-month peak, with the value of photovoltaic cell imports in the first nine months surpassing the total from the previous three years through 2022. The majority of these originated from China, which has supplied between 57% to 100% of India’s imports of modules, cells, wafers, and solar glass since early 2021.
Steps to self-sufficiency
Indian solar glass manufacturers are efficient, but Chinese companies benefit significantly from subsidies, giving them a competitive edge, and making their goods more cost-efficient in the Indian market. This is what led Borosil Renewables, India’s largest and oldest solar glass manufacturer, to call for anti-dumping duty and the introduction of MIP (minimum import price) in 2024.
The government had already taken steps to support domestic players, like introducing customs duties and the Approved List of Models and Manufacturers (ALMM). However, the Borosil Renewables management felt more action was needed to cater to the huge demand for solar glass, a critical component in the manufacturing of Photo Voltaic (PV) solar panels.
In an interview to CNBC-TV18 in November 2024, Pradeep Kheruka, Executive Chairman of Borosil Renewables stated, “We are now looking at an anti-dumping duty to be imposed on the imports of solar glass on top of the basic customs duty. The government is signalling an intent to help local industry to develop away from the effects of artificial artificially low prices in the shape of dumping.”
Anti-dumping duty and what it means
In the fiscal 2025 budget, the government introduced a 10% import duty on solar glass, effective from October 2024. Furthermore, on December 4, 2024, a provisional anti-dumping duty was levied on solar glass imports from China and Vietnam for a duration of six months. This will help domestic manufacturers restore their margins and profits to a healthy level and expand their businesses.
Earlier this month, Borosil Renewables announced a major 50% expansion in its manufacturing capacity from 1,000 tons per day to 1,500 tons per day. This is expected to significantly boost the domestic production of solar glass, required for the production of photovoltaic (PV) solar panels.
The import and anti-dumping duty is expected to benefit other domestic players, strengthen the supply chain, reduce import dependence, save foreign exchange, and promote job creation within India. On the other hand, a case could be made that applying tariffs to imports makes it more expensive for power generation companies and, effectively, for end consumers.