Why should one invest in this sector ?
India has the fifth largest power generation portfolio worldwide with a power generation capacity of 304 plus GW
Economic growth, Increasing prosperity, a growing rate of urbanisation and rising per capita energy consumption has led to increase demand for energy in country. India has huge renewable energy resource availability and potential.
The target of national Solar Mission has been scaled up to 100 GW from 20 GW of grid connected solar power by 2022, which creates a positive environment among the investors keen to tap into India’s renewable energy potential.
Government of India has a target of adding 175 GW of renewable power in the country by 2022, which will offer massive investment opportunities across the value chain. Since government has very ambitious plans on solar installations, and the policies are formed to support the business in long run, this sector will have a very high growth in next 10 year. The solar business is booming up, and shall continue an attractive business definitely for next 2-3 decades.
Is it beneficial to start PV module business in India ?
Global PV module production capacity is around 47.5GW and it is expected to grow to 135 GW by 2020.
Greentech Media expects production overcapacity to fall to just 26% in 2017. Hence pressure from PV modules prices may come down by 2017. So setting up a PV module manufacturing in India is definitely advantageous. There are few more benefits to produce in India-
- 32% all new capacities addition is coming up in India.
- India provides 10 year tax concession window and accelerated depreciation benefit, which is one of best incentives in the world.
- Global demand- rather than just US, China, Japan and Germany, Indian manufacturers can look at Africa as additional market for PV modules.
- India has compulsory domestic PV module manufacturing in National Solar Mission that could generate a demand of 3-4 GW a year.
The state government of Maharashtra, India has made it compulsory for all new commercial and major residential buildings to have roof top solar installation, where all the security lighting and common lighting should use solar power. This has opened up a very big market in Maharashtra state in India for solar modules.
Apart from the new buildings, existing buildings, government offices, educational institutes etc are also opting for solar power, mainly due to the awareness created. These existing establishment also have a great potential requirement of solar installations.
Starting a solar module business in India is definitely a beneficial and attractive business for next decade. Specially considering the ambitious plans set by government, it’s policies to support and the global pressure on more and more usage on renewable energy usage has created a huge opportunity for this business.
Why should one start manufacturing solar modules?
The solar modules can be easily exported, to developed and under developed countries. The local labour cost is cheaper compared to European market, which makes assembly of solar modules in India cost effective. Also the majority of materials used for solar modules are exported to European countries from India, so the costing of these components will be lower, which again makes the solar module cost attractive. With this cost advantage the solar modules made in India, can be exported to Europe, America and other developed countries as well.
India is having very good relations with Africa, Middle east and other countries, a lot of goods and services are exported to these markets. Solar modules and complete turn key project for solar power generation can be exported to these countries form India.