Chinese manufacturers give tough competition to Indian cos in solar business

Indian manufacturers have long been troubled by Chinese companies in almost every industry. Now, they are facing a new challenge from China in the cleantech sector.

Even major domestic companies such as Tata Power, Adani Group, Jupiter Solar and Bhel are facing trouble to stay in the business amidst high cuts offered by Chinese manufacturers on solar cells.

According to a report by Mercom Capital Group, which tracks the clean energy segment, India's import of solar cells and modules is more than 35 times its export.

The report added that as the Chinese panels are 10-20 per cent cheaper than domestically manufactured modules, no developer wants to willingly pay more.

Experts say that Chinese solar equipment is cheaper than Indian mainly due to economies of scale at its manufacturing units, as well as the fact that India does not manufacture polysilicon, the basic material for making solar modules, but imports it.

However, cheaper imports last year helped pull down solar power tariff to Rs 2.44 per unit which is much lower than coal-fired electricity.

Govt takes notice

In July this year, the Directorate General of Anti-Dumping (DGAD) started a probe to ascertain if dumping of solar panel imports from China, Malaysia and Taiwan is hurting the domestic industry.

The investigation was in response to an application from the Indian Solar Manufacturers’ Association (ISMA), which had pleaded a retrospective duty be imposed on the importers as dumping of the modules has considerably damaged the prospects of the indigenous sector.

New undeterred players enter Solar market

According to media reports, Yoga guru-cum-business tycoon Baba Ramdev-led Patanjali Ayurved is also planning to enter into manufacturing solar power equipment with an investment of Rs 100 crore.

The entry is an attempt to utilize the Indian government’s push to the clean energy and aims to achieve 175 GW of renewable energy by 2020 and 100 GW of solar energy by 2022.

According to the company, it is not going to get into the price war with the Chinese players and will manufacture solar panels in India without compromising the quality.