Update: Indian solar industry suffocated by US thin-film manufacturers

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Non-governmental organization (NGO), the Centre for Science and Environment (CSE), is accusing US thin-film manufacturers of using a loop hole in the Indian government’s renewable energy scheme to “ruin the Indian domestic PV industry”. The Jawaharlal Nehru National Solar Mission (JNNSM) initiative mandates a domestic content requirement, however, only for crystalline PV and not for thin-film.

CSE researchers state that with 80% of Indian manufacturing capacity in a state of disarray, forced to shutter operations or initiate debt restructuring proceedings, the government is under a great deal of pressure to meet its target of adding 22GW of solar energy to the national grid by 2022.

In three years, India has gone from almost zero to close to 1,000MW of solar installations in the country.

Owning to the United Nation’s Copenhagen Accord, the US fast start finance option has been implemented to encourage overseas private development. Under this scheme, the US has currently loaned US$26.8 million to India – more than any other country it is involved in under the UN programme.

According to figures from the fast start finance website, both The Netherlands and Germany have offered grants to India totalling US$35.4 million and US$27.6 million, respectively.

Chandra Bhushan, CSE's deputy director general, said, “The US has been very disingenuously using this fund to promote its own solar manufacturing. The US Export-Import Bank of the United States (Ex-Im) and the Overseas Private Investment Corporation (OPIC) have been offering low-interest loans to Indian solar project developers on the mandatory condition that they buy the equipment, solar panels and cells from US companies. This has distorted the market completely in favour of US companies.”

The CSE claims the Ex-Im and OPIC are seducing Indian companies by offering low interest rates of approximately 3%, payable over an 18-year period. Loans from Indian banks come with an interest rate of close to 14% or more. The CSE attests that, “Close to 60% of panels installed in India are thin-film even though only 14% of global capacity is thin-film.”

Despite these claims, MJ Shiao, a solar analyst for GTM Research speaking to PV Insider, believes that it is not the JNNSM loophole, but thin-film performance that is the key reason for India’s increased deployment of thin film.

“A lot of thin-film manufacturers have been able to communicate to the Indian solar market that thin-film does produce better in the Indian climate than crystalline silicon technologies,” he said.

“With hot, muggy Indian weather the thin-film panels will produce more kilowatt-hours per kilowatt than a crystalline silicon module. You're getting a little more bang for your buck.”

Conversely, Stefan de Haan, principal photovoltaic analyst at IHS iSuppli, maintains the more widely accepted idea that, “The underlying reason is that they [US manufacturers] can get around the local content criteria using thin-film. That's why the American CdTe producers First Solar and Abound Solar are very successful there.”

Regarding the domestic content requirement, Dr Tobias Engelmeier, managing director of Bridge to India said, “In Gujarat, where there is no local manufacturing stipulation, thin film still dominates. That tells me that probably that argument isn't valid.”

Finlay Colville, VP of Solarbuzz told PV-Tech that, “The fact that Indian manufacturing capacity is having such a difficult problem is much broader than any domestic policy within India. Indian c-Si manufacturing has never fulfilled the expectations of a few years ago and by the time capacity was finally ramped up in India; the PV industry globally had changed significantly.

“PV manufacturing in India is not cost-competitive today with industry leaders, with or without any domestic protectionism. For any domestic suppliers to be competitive – locally or globally – they need to be at the top of their game.”

Ex-Im has agreed numerous loans to export US-made solar panels and ancillary services to India. Two such loans totalled US$57.3 million to Solar Field Energy Two and Mahindra Surya Prakash, in July.

Thin-film market leader and number two ranked PV module supplier First Solar was reported to have almost secured around 80-90% of projects (200MW-plus) under India’s 2012 National Solar Mission projects, according to Deutsche Bank analyst Vishal Shah, in February this year. Ex-Im was said to have played a critical role in this agreement.

Last year, Ex-Im also agreed to fund CIGS module manufacturer MiaSolé’s foray into Gujarat for a 2MW solar PV project. In November 2011, Ex-Im has awarded loans totalling US$103.2 million to two Indian companies to help finance planned projects in Gujarat and Rajasthan.

The list goes on.

Nevertheless, last week Ex-Im signed a declaration of intent with the Industrial Development Corporation of South Africa, to provide financing up to US$2 billion. The DOI aims to progress the South African government’s Integrated Resource Plan and the South African Renewable Initiative.

Notably, domestic thin-film plants in India do exist. Indian manufacturer Moser Baer had a small scale thin-film plant in India; however, contentions between an undisclosed company and the Delhi government arose when the state called for the “debarring of Moser Baer for poor performance of solar projects.”

CSE’s Bhushan continues: “The misuse of fast start financing by the US is unethical. Fast start financing was supposed to benefit the developing country recipient. Instead, the US has managed to turn it into a game where funds registered as climate funding is given out as loans to projects that promise to buy equipment made in the US thereby benefiting themselves while knocking out the Indian manufacturing competition that doesn't have the same government backing. In the long-run, this is doing more harm than good to the Indian solar sector.”

Kushal Yadav, head of CSE's Renewable Energy team says, “Interestingly, the US government has put anti-dumping duties on solar equipment imported from China because of the alleged subsidies that China is giving to its solar manufacturers. However, the US is engaging in a similar practice in India by subsidising loans for buying American equipment!”

Update: OPIC and Ex-Im have refuted the allegations of CSE

Judith Pryor, vice-president of external affairs at OPIC told Environmental Finance that, “OPIC provides financing that is unavailable from local or foreign private-sector financial institutions. In other words, we don’t compete with the local markets. And before OPIC supports a project, we determine whether that project will be subject to any trade-related performance requirements”.

A spokesman for Ex-Im stated, “Any OECD member country can offer financing for up to 18 years – this is not special to the US. “We don’t set the interest rates, [those are] negotiated between the borrower and the lender.”

22 September 2021
To commemorate the World Energy Storage Day(WESD) on 22 September, being recognized worldwide, Customized Energy Solutions (CES) and India Energy Storage Alliance (IESA) is organising the 5th global conference and virtual expo, which will be held virtually on 22 September 2021. WESD is a global movement initiated by various apex trade bodies working to promote and adopt energy storage, e-mobility & green hydrogen technologies for a sustainable future. The forthcoming edition of WESD is expected to attract global participation with an intent to facilitate bi-lateral trade, market development and new research and innovation, which will invite 100+ countries, 100+ regulators & policy makers, 100+ International speakers,1000+ organisations, 100+ partners & exhibitors and 20,000+ global delegates.
28 September 2021
Solar Solutions International is the largest trade show for solar energy in Northwest Europe. Now the solar market has grown up, it's time for the next step. Solar Solutions International displays more than 500 innovations and over 100 practical seminars concerning the latest in energy storage, smart products, and an ever evolving array of solar panels. As an exclusively B2B trade show, Solar Solutions International offers both exhibitors and visitors the chance to network at the highest level. Duurzaam Verwarmd, the largest trade show for sustainable HVAC technology in the Benelux, is held simultaneously. This way your one visit gets you up to date with all of the developments in both sustainable energy and heating.
6 October 2021
Intersolar Europe is the world’s leading exhibition for the solar industry. It takes place as part of The smarter E Europe – the continent’s largest platform for the energy industry. Under the motto “Connecting solar business,” manufacturers, suppliers, distributors, service providers and project planners and developers from around the world meet in Munich every year to discuss the latest developments and trends, explore innovations firsthand and meet potential new customers.
6 October 2021
The future is bright for a new era of US solar and storage, and the 8th annual Solar & Storage Finance Summit will provide opportunities to discuss solutions to the industry’s challenges and provide a networking platform designed to bring together the top minds in the industry to do business. With a mix of high-level, informative presentations and panels, a stellar cast of speakers and audience members with deal-making capacity, the 2021 edition of the event will be a sell-out success.
18 October 2021
Intersolar South America, South America’s largest exhibition and conference for the solar industry, takes place at the Expo Center Norte in São Paulo, Brazil on October 18–20, 2021, and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. At the accompanying Intersolar South America Conference, renowned experts shed light on hot topics in the solar industry.
19 October 2021
This year’s EV World Congress will hold a special role, not only as the first live EverythingEV event in over a year – a chance to renew your connections and re-engage with the EV sector face to face – but also as a chance to share insight and inspiration as world starts to look towards move on post COVID towards hitting ambitious decarbonisation goals in 2030 and beyond. As ever, we will be bringing world leading organisations, cities, and technology providers to the UK to inspire EV innovators, and delve into the challenges facing the sector as the UK looks to revolutionise road transport.

Read Next

September 17, 2021
BP, Abu Dhabi National Oil Company (ADNOC) and Masdar have partnered up to develop low carbon hydrogen hubs and create decarbonised air travel corridors between the UK and UAE in a deal that will see “billions” of dollars of investment.
September 17, 2021
US utility company Dominion Energy Virginia has proposed 15 new energy projects totalling 1GW of power for the state, which Dominion Energy claimed was the largest group of projects to be submitted to the Virginia State Corporation Commission (SCC)
September 17, 2021
Renewables developer Ørsted has promoted Neil O'Donovan to CEO of its onshore business unit following the resignation of his predecessor in August.
September 17, 2021
A 58.5MW floating PV plant in Thailand, said to be the largest install of its kind in the country, has been connected to the grid, according to inverter and floating solutions supplier Sungrow.
PV Tech Premium
September 17, 2021
PV Tech spoke to investors and analysts about why Brazil is fast becoming an attractive market for solar investment.
September 16, 2021
Vistra Energy has welcomed the enactment of clean energy policies in Illinois which the power generation company said will support 300MW of solar and 150MW of battery storage to be built at nine of its coal plant sites. 

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
Solar Media Events
December 1, 2021