The US International Development Finance Corporation (DFC) has announced plans to invest US$425 million into Tata Power subsidiary TP Solar, which it plans to use to build a 4.3GW solar cell and module manufacturing plant in India.
TP Solar expects the project to produce its first modules by the end of this year, and to begin commercial cell production in the first quarter of the 2024 financial year. Tata Power boasts a large power generation portfolio in India, with 12.2GW of capacity under its ownership, but relatively little of this is solar capacity, with just 1.7GW of solar installed as of 2022.
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However, the company has taken a number of steps to expand its solar portfolio, beginning with the operation of a 1GW cell and module manufacturing plant in the southern state of Karnataka. Tata Power’s recent investment into renewables has created a stark geographical split in its portfolios across India, with some regions boasting significantly more renewable capacity than others.
The states of Gujarat, Uttar Pradesh, Maharashtra and Jharkhand, in the north and centre of India, contribute significantly to the company’s fossil fuel production, while the states of Karnataka, Rajasthan, Tamil Nadu, Andhra Pradesh, Madhya Pradesh, Bihar, Punjab and Telangana produce significantly more solar power than any other energy source. Many of these states are in the south of India, and TP Solar plans to build its new manufacturing facility in one of these states, Tamil Nadu.
“We appreciate DFC’s assistance for our solar cell and module production facility in Tamil Nadu,” said Praveer Sinha, Tata Power CEO and managing director. “It shows the trust and belief DFC has in Tata Power’s ability to set up a state-of-the-art manufacturing supply line in the country. This will go a long way in supporting the renewable and clean energy transition in the country.”
The involvement of the US could help India realise some of its ambitious solar power goals. In H1 2023, Indian developers added 3.6GW of new solar capacity, 43% of all new power capacity additions added in the period. However, the volume of new solar capacity additions was 53% lower than in H1 2022, so questions remain as to whether India can effectively ramp up its solar sector over the long-term.
Also this week, TP Solar announced plans to launch a new funding process alongside the Small Industries Development Bank of India. The programme will provide “customised and innovative financing solutions” for micro-, small- and medium-sized businesses interested in investing in new solar projects, as India looks to maximise its growing solar sector.