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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's Solar Exports Surge in Europe, While India's PV Module Imports Plummet Image Source -www.nationalheraldindia.com

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.

Also Read: Google Search's Innovative Language Learning Feature Now Available For Indian Users

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.

 

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Arijit Dutta

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