China's Solar Exports Surge in Europe, While India's PV Module Imports Plummet
- Posted on October 21, 2023
- Business
- By Arijit Dutta
- 363 Views
China has faced challenging trade conditions, with both exports and imports declining sharply, as reported by the country's customs authority. This drop extends beyond just semiconductor devices and computers. Notably, solar photovoltaic (PV) module exports from China to India have decreased by over 70% on a yearly basis, according to a report from UK-based energy think tank Ember.
China has faced challenging trade conditions, with both
exports and imports declining sharply, as reported by the country's customs
authority. This drop extends beyond just semiconductor devices and computers.
Notably, solar photovoltaic (PV) module exports from China to India have
decreased by over 70% on a yearly basis, according to a report from UK-based
energy think tank Ember.
One key factor contributing to this decline is the
introduction of stringent tariff policies in India. The Union Government has
also implemented measures like the Production-Linked Incentive Scheme and
mandated approvals for solar manufacturers, aiming to boost domestic
manufacturing. Basic customs duties of 25% on solar cells and 40% on solar
modules for imports from China make it an unviable option compared to domestic
players, says Jyoti Gulia, Founder of JMK Research & Analytics.
Furthermore, the Approved List of Module Manufacturers
(ALMM) norms, once in effect, could further impact imports of solar PV modules
from China. Gulia highlights that starting in April 2024, only ALMM-listed
modules can be used in Indian projects. This makes importing from China
unfeasible, as none of the Chinese players are currently on that list.
Despite the decline in PV module exports, China remains a
dominant force in solar manufacturing. Solar cells, essential for making solar
panels, constitute 10% of China's solar exports. India continues to rely on
China for solar cells, and Ember's data reveals that India is the second
largest importer of solar cells from China after Turkey.
China has seen a 34% increase in solar exports for the
first half of 2023, shipping 114 GW globally. Europe, shifting away from fossil
fuels, is the biggest importer of solar PV modules from China. China's strong
push for solar panel manufacturing, alongside its head start in the industry,
underscores its dominance.
To diversify solar supply chains, India is also striving to bolster domestic manufacturing. While China has a 70% share in solar module production, countries like the United States are encouraging domestic players. Initiatives like the US Inflation Reduction Act 2022 aim to reduce emissions and incentivize solar panel manufacturing via tax credits.
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India's solar exports are surging, growing fivefold in
FY2023 compared to FY2022. This growth underscores the need for greater
emphasis on domestic manufacturing, as revealed by industry players and
Subrahmanyam Pulipaka, CEO of the National Solar Energy Federation Of India.
India's solar exports may be dominated by the US, but
China continues to export to Europe and expand trade with Africa. Concerns
regarding supply chain shocks from China persist, as do issues related to
skilled workforce and production apparatus for India's solar manufacturing
ambitions.
Pulipaka emphasizes the importance of self-reliance in
the solar supply chain, emphasizing the need for domestic capabilities and
energy security. Strengthening technology, equipment, and skilled manpower
remains essential for India to scale up its solar manufacturing.