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Indian govt incentives spur solar industry

Posted: 05 Jul 2007     Print Version  Bookmark and Share

Keywords:solar cell manufacturing market  photovoltaics industry  India solar industry 

Although the question still hangs on a semiconductor-manufacturing plant in India, it's a different story when it comes to indigenous solar-cell manufacturing. The Indian government has announced incentives for manufacturing solar cells and panels earlier this year and has targeted meeting 10 per cent of the country's power needs through renewable energy by 2012.

Given the frequent power outages throughout the country, the announcement has spurred a flurry of announcements by companies looking to join the nascent solar industry here.

Signet Solar chairman Prabhu Goel has announced the most ambitious plans thus far#8212;an investment of Rs.8,173.33 crore ($2 billion) over 10 years to set up three plants in India. Signet operates a plant in Germany and expects to leverage that experience to ramp production here.

According to Goe, Signet will conduct R&D in Germany and India and try to drive down costs though product innovation. The company is courting customers among photovoltaic system integrators and installers of solar farms.

Tata BP Solar, a joint venture between the Tata Group of India and BP Solar of the United Kingdom, operates one of the oldest solar-energy equipment manufacturing plants in India, near Bengaluru. The plant is being expanded now, at an additional investment of Rs.408.67 crore ($100 million).

Homegrown storage-hardware manufacturer Moser Baer has announced it is building Rs.1,021.67 crore ($250 million) plant to make solar energy products in northern India using technology from Applied Materials Inc. "The global photovoltaics market is on a high-growth curve, and sales are expected to grow by six times, to Rs.163,466.64 crore ($40 billion), by 2010. We believe our expertise in related production technologies will help us get a leadership position in the global PV industry," said Ravi Khanna, CEO of Moser Baer Photo Voltaic Ltd (MBPVL).

When operational, the MBPVL plant is expected to generate annual sales approaching Rs. 408.67 crore ($100 million), largely but not exclusively through exports. The photovoltaics business is not capital-intensive and promises a high return," Khanna said. MBPVL is also evaluating emerging technologies, including nanotechnology and concentrator photovoltaic cells, to bring down the cost of solar equipment, Khanna said.

Cypress Semiconductor, meanwhile, is reportedly considering a Rs.204.33 crore ($50 million) facility to make solar cells and wafers near the southern Indian city of Hyderabad, likely through SunPower Corp., in which it holds a majority stake.

SunTechnics Energy has a manufacturing plant in Bengaluru and plans to expand it. "The upsurge in demand in India, by nearly 25 per cent annually, is prompting several players to put in huge investments. Companies make these investments [largely] for export reasons, to cater to global needs, which are far greater than local needs," said Rajesh Bhat, director and country manager for SunTechnics.

Bhat believes the cost of solar cells must come down to encourage solar-energy adoption. Adoption of nanotechnology can help on the cost front, Bhat said, but "the day the government introduces attractive feed-in tariffs, incentives to individuals and industries, renewable energy will become the next booming industry in India, after software services."

Local growth of the solar industry has benefited technology providers such as Applied Materials, which is poised to see a pickup in its business in India. "Innovative incentive schemes are necessary for mass adoption [of solar power] in India. Government policies need to be implemented for market adoption and growth, such as financing schemes for individuals investing to absorb the high upfront costs," said senior director Arulkumar Shanmugasundram.

- K.C. Krishnadas
EE Times

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