ISA Releases PV Industry 2010 Report

ISA solar ISA Releases PV Industry 2010 Report

The India Semiconductor Association (ISA) has released a report on the‘Solar PV Industry 2010: Contemporary Scenario and Emerging Trends’ with the support of the Office of the Principal Scientific Advisor (PSA).

The report was released by Dr. R Chidambaram, Principal Scientific Adviser, Government of India, Chief Guest for the function with Prof. JuzerVasi, IIT Bombay & Head Core Committee and BV Naidu, Advisor ISA.
This report will serve as an important referencesource for the various stake holders in the solar PV industry.

Executive summary
Solarphotovoltaic is a key technology option to realize the shift to adecarbonised energy supply and is projected to emerge as an attractivealternate electricity source in the future.

The solar PVmanufacturing base in India comprises primarily of cell and modulemanufacturing; with the bulk of the value addition taking place outsidethe country. The current scale of manufacturing in India is small incomparison to global standards.

The capacity in India iscurrently estimated in excess of about 400 MW for cells and about 1,000MW for modules. Based on the interactions with the industry, thecapacity of PV cells and modules in India is estimated to cross 750 MWand 1250 MW by the end of year 2010. The production in India for year2008-09 is estimated at 175 MW of cells and 240 MW of modules. A largeproportion of the production was exported.

Solar energy is animportant mitigating technology in the context of the climate changethreat. The Jawaharlal Nehru National Solar Mission is an importantcomponent of the National Action Plan on Climate Change.

The current report essentially has capturedthe following:
• Status of the global PV industry- with afocus on Europe, the US, China, S. Korea, Japan and Taiwan.
• Statusof the Indian solar PV industry including its strengths and challenges.
• Government initiatives to promote this industry- including a detaileddiscussion on the recently announced National Solar Mission (NSM).

Key findings
Strengths and challenges of the Indian solarPV market

• Even though the industry operates at a smaller scale as compared to other solar PV producing nations, production inIndia is very cost effective as compared to global standards. The pricecompetitiveness of Indian industry makes it a preferred vendor for endusers in countries like Germany and Spain.

• With Governmentinitiatives in place to support and develop infrastructure for solar PVproduction (refer to SIPS scheme) and JNNSM to promote application ofsolar PV in domestic market, the Indian solar PV industry is likely togain further edge over other solar PV producing nations.

• There is no manufacturing base in India for the basic raw material – siliconwafers. The industry hence relies on international markets to source the raw material.

• The silicon market has been highly fluctuatingin the past, leading to imbalance in demand supply equation, fluctuating prices and availability of raw material. Currently, the siliconproduction capacity is much higher than the demand and prices are atsignificantly low levels compared to the scenario a year back. In thepast, some of the solar PV firms have entered into rate contracts withsilicon wafer suppliers to ensure availability. With a sudden reductionin prices, the contracts now prove to be a loss making proposition forthese firms.

• Over the last five years, China has emerged as the largest producer of solar cells in the world. The country currently has about 2,500 MW of production capacity for solar PV as compared toIndia’s 400 MW. Apart from that, Taiwan, with annual capacity of 800 MW, is also emerging as a major threat to the Indian industry.

•Price reduction is another major challenge for the industry as thiswould have greatly impact the future growth of the market.

Emerging trends
• Solar PVapplications in India have followed a different trend from the globalpractices. While globally, there has been higher focus on the gridconnected applications, the Indian PV market has predominately focusedon the off-grid applications.

• JNNSM is a welcome step from theGovernment, to accelerate growth of the Indian PV industry. The policyaddresses all the major issues currently being faced by the industry and also acknowledges key challenges in achieving the Mission objective.Grid connected solar power generation is a key thrust area of the JNNSM.

• The proposal to extend PPA duration to 25 years will improve thefinancial feasibility for power developers. JNNSM is technology neutraland defines an R&D roadmap to develop indigenous strengths intechnology and reducing the dependence on international markets. TheJNNSM also addresses issues of manpower development for the industry.

We expect the above initiatives will promote the domestic solar PVindustry.