India’s Solar Energy Plans Bogged Down With Supply Chain Issues

Amid lockdown across the country, which is likely to be extended due to ongoing coronavirus pandemic, the damage to India’s solar ambitions is given, the only question is how much.

In India, around 2.3 GW of solar plants were expected to be commissioned from June to August 2020. However, the delivery of these projects has been impacted by the coronavirus (COVID-19) pandemic, says GlobalData, a data analytics firm.

“Before the pandemic, these plants were expected to be supplied with modules by the end of March 2020, but the ongoing situation has impacted capacity addition plans and is expected to delay future bids. To overcome this situation, the All India Solar Industries Association has asked the government to consider subsidizing the cost differential and urge domestic manufacturers to ramp up their production,” said Somik Das, Senior Power Analyst at GlobalData.

It is in-line with the industry body Confederation of Indian Industry (CII) estimation which says that the solar sector is expected to see a surge in the prices of components due to decreased production, as well as constraints faced by the supply chain and logistics around procuring components from China where production is reduced due to the pandemic.

As per CII, the virus outbreak has created other issues for the Indian solar industry, with shipping companies having stopped uploading materials from Chinese ports and transporting them to other countries, including India.

“The pandemic has caused major trouble for the solar components supply chain. This, in turn, has negatively impacted the projects in the pipeline, raising questions over the deadline within which these projects are to be completed,” Das added.

The report further stated the example of the All India Solar Industries Association suggested exempting solar module producers in Special Economic Zones (SEZs) from 25 percent safeguard duty on imports of solar cells and modules for domestic facilities.

Besides, CII has also recommended that removing the higher customs duties imposed on any products that are primarily sourced from China that may need to be sourced from other countries due to the pandemic. The Indian Government may have to reconsider the recent imposition of higher duties as well.

On the CII’s concerns, Das added that “CII has shown concerns for the completion of solar projects scheduled in the next two quarters and has decided to re-visit the import strategies for solar module sourcing. The confederation has encouraged Indian PV manufacturers to consider the current situation as an opportunity to build a strong and competitive domestic solar manufacturing industry. Hence, initiatives are at full swing, trying to lessen the impact of the pandemic.”