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RE Developers are Worried of Transmission Woes

RE Developers are Worried of Transmission Woes

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DOMESTIC SOLAR MANUFACTURING SCENARIO GROWTH OPPORTUNITIES

17 Sep 2019

The efficiency and power output of a PV module decrease at the peak of sunlight due to energy loss as heat energy and this reduces the module power output. Multi-concept cooling technique, a concept that involves three types of passive cooling, namely conductive cooling, air passive cooling and water passive cooling has the potential to tackle this challenge. The experiment was set up using two solar panels of 250 watts each with both modules mounted at a height of 37 cm to create room for air-cooling, with the application of water-cooling at the surface of one of the PV modules to reduce the surface temperature to 20  ?C. The rear of the same module attached to an aluminium, Al heat sink. The other module also mounted was without water-cooling and Al heat sink attachment. The Al heat sink comprises aluminium plate attached with aluminium fins to aid cooling, and water at a reduced temperature achieved with the introduction blocks of ice facilitated the module surface cooling. Analysis of the power output achieved, carried out with the help of the equation for PV array power output with a derating factor of 80%. The experiment recorded an increase in output power of 20.96 watts, and an increase in efficiency of not less than 3% achieved thus making the module more efficient and productive.

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What's bothering the domestic solar industry?

Late last month, the government had ordered a safeguard duty probe on surging solar cell imports with a view to protect domestic manufacturers. But today, the All India Solar Industries Association (AISIA), the industry body of domestic solar manufacturers, has come out strongly against the imposition of any such blanket import duty, claiming that it will hurt manufacturers operating from SEZs). SEZ units are treated on par with foreign manufacturers and hence any safeguard duty will be detrimental to the domestic solar industry as a whole. Ironically, the probe was ordered after the domestic industry approached the Directorate General of Safeguards last month. A complaint had been filed by the Indian Solar Manufacturer's Association (ISMA) on behalf of five Indian producers-Mundra Solar PV, Indosolar, Jupiter Solar Power, Websol Energy Systems and Helios Photo Voltaic-alleging that their market share has remained stagnant despite rapid expansion in demand for solar cells in the country.Under the World Trade Organization framework, a member country can impose a Safeguard Duty for a certain time-frame if the quantity of imports surpasses domestic production thus damaging the domestic industry.Imports of solar cells-primarily from China, Malaysia, Singapore and Taiwan-increased from 1,275 mw in 2017-18 to 9,331 mw in the last fiscal. On the other hand, domestic production stood at 246 mw in FY15 and is likely to increase to 1,164 mw in the current financial year. The market share of domestic players has steadily diminished in the same period-from 13% to an estimated 7%. In light of the above, ISMA had asked for safeguard duty on "solar cells whether or not assembled in modules or panels" immediately for four years.

AISIA has countered that 60% of the country's currently-installed solar capacity are in SEZs. Furthermore, SEZs account for about 45% of the 8,300 mw of solar module manufacturing facilities. "Hence, the indigenous manufactures situated in SEZ will come under the ambit of any blanket duty that will be imposed on solar cells and modules, which will make them uncompetitive," said Chaudhary.

The association further said the specific anti-dumping duty on imports from China, which is flooding the domestic market with its cheap solar modules, is making domestic industry unviable. In FY17, estimated demand of solar modules was around 6000 mw, which is expected to go up to 10,000 mw this fiscal. "The purpose of duty should be to protect the domestic industry from dumping. Levying duty on domestic manufacturers can also lead to an increase in the cost of power that will discourage the domestic industry," he added.

This, incidentally, is just the sort of protectionism that the US has long been accusing India of. In 2018, Washington complained to the WTO that India's solar program was discriminatory and that US solar exports to India had fallen by 90% since 2018.

In 2018, the WTO had found India guilty of violating trade rules by requiring solar power developers to use Indian-made cells and modules. The panel also struck down incentive policies such as subsidies provided for domestic solar companies. But, last month, the US triggered a new round of litigation at the WTO, arguing that India had failed to abide by the above ruling.

In a statement published by the WTO yesterday, India has countered it has changed its rules to conform to the ruling and that the US claim for punitive trade sanctions are groundless. The Indian statement added that Washington had skipped legal steps, failed to follow the correct WTO procedure, and omitted to mention any specific level of trade sanctions that it proposed to level on India, leaving India "severely prejudiced".In any case, such allegations do not bode well for the solar power sector. According to Quartz India, against the National Solar Mission's yearly target of 15,000 MW for 2017-2018, India commissioned just over 3,000 MW of solar power as of December 2018. That makes the government's target of 100 gw solar capacity by 2022 a bit of a joke, unless things change significantly on the ground.

With strong sunshine beating down on rooftops across most of this tropical country, the future of solar power in India is bright indeed.Solar is booming in India, but the country’s solar panel industry could be facing a dimmer future

At the end of this year, India will end its “domestic content requirement” for solar projects that are part of its National Solar Mission, a component of the country’s National Action Plan on Climate Change. A World Trade Organization ruling from last year is to blame. India will continue to expand on solar, but nearly all of those panels might soon be imported from other countries.This is a problem because a key part of India’s enthusiasm for solar was tied to the desire to develop a new high-tech industry. Instead, as India expands its solar capacity, it could end up reliant on China, which exports panels at bargain-basement prices, to meet its energy needs.Both Indian Prime Minister Narendra Modi and his predecessor, Manmohan Singh, championed solar as a way to connect the hundreds of millions of Indians who remain without electricity to the country’s rapidly expanding grid. In 2015, Modi announced his intention to add 100 gigawatts of solar by 2022, a goal that was initially seen as lofty but that has been helped along by plummeting solar prices. India hasn’t hit its annual targets each year, but has expanded solar rapidly enough that the 100 gigawatt goal remains within reach. The country is now pondering a new target of 175 gigawatts. (For reference, a single gigawatt is enough energy to power hundreds of thousands of North American homes — and many more in the developing world.). The Indian government’s embrace of solar has helped the country begin to decrease its reliance on coal. That, in turn, has helped international efforts to confront climate change maintain their momentum — even as the US has abandoned the Paris Agreement. The fact that relatively poor, populous and coal-reliant countries like India and China are increasingly turning to renewables despite the US’s refusal to cooperate are encouraging successes in the face of a major setback.

As originally conceived by Singh’s and Modi’s governments, India’s solar effort would involve mandates that a percentage of the solar panels come from manufacturers based in India — these mandates were the “domestic content requirements” (DCRs) that the WTO found to be overly protectionist. The plan, under the Solar Mission, was that India’s solar industry would grow to meet the demand created by the DCRs, and would eventually be able to make panels that could compete with the cheap and abundant ones manufactured in China, or the technologically advanced ones manufactured in the US. India’s growing solar industry would then create jobs for Indian workers, and a potential export for the country.But in announcing its intention to build a robust solar industry, India became a target for China and the US, the world’s two dominant producers of solar panels who had for years been lobbing complaints back and forth at one another through the WTO, each trying to slap down the other’s policies aimed at protecting their domestic solar manufacturers from international competition.In 2018, the US government, under pressure from its own domestic solar manufacturers and green tech investors, filed a complaint against India’s DCRs with the WTO. In 2018, the WTO ruled against India. At the time, India’s joint secretary of new and renewable energy told the trade publication PV Tech that the ruling would “not affect the future course of action” — India’s ambitious plans for ramping up solar generation would move ahead, with or without the DCRs.But when, in December, the DCRs disappear, the country’s domestic solar manufacturers will have to operate for the first time without government protection assuring a certain amount of demand for Indian-produced panels, and some are worried that this could spell the end of the Indian solar industry. A lot of local companies, local solar panel manufacturers are going to die out. The Indian Renewable Energy Ministry is still weighing other policies that could help protect the domestic solar industry but that would not be struck down by the WTO, but they haven’t yet arrived.

These Chinese panels are so cheap that they make solar a more affordable option than coal; Indians accuse China of selling solar panels at artificially low prices — prices that are even lower than the cost of producing the panels — in order to maintain its near monopoly on India’s solar market, a practice called dumping. Ultimately, the end of India’s solar protectionism could prove another small step forward for China as it seeks to become a dominant player in providing solutions to climate change — and claims the profits and influence that come along with that dominance.

China’s cornering of the solar market is both good and bad news as countries around the world work to meet their commitments under the Paris Agreement. The good news is that China’s solar panels are cheap and abundant, and able to compete with coal in many developing countries. More than any other country, China has been able to turn the fight to avert global catastrophe into an economic opportunity. The bad news: Increasingly, China is enjoying a virtual monopoly on solar in developing countries, with the ability to control the price of panels, the supply of panels, the type of panels manufactured and the rate at which the technologies in those panels improve. India, an enormous market, could become the latest example.

 

India’s PV module manufacturing sector needs serious attention

India’s manufacturing sector is set to take a giant leap forward, with the govt. announcing a slew of measures to boost domestic manufacturing in recent past. As a result, various CoS are gearing up to expand their production facilities in India. However, Indian manufacturers continue to face a stiff competition with Chinese & other global manufacturers leading them to operate insufficiently. There could be various reasons ranging from the govt.’s existing domestic insufficient content policy to fewer types of subsidies or the interest rates on raw material thus making them to be inadequate in promoting the domestic PV module manufacturing industry. However, the challenges in the current policy regime & steps India might take to better position itself to become a global leader in the PV module manufacturing needs a strong overhaul.Solar power is the strategic need for the country as it can potentially save USD 20 bn in fossil fuel imports annually by 2030 & domestic manufacturing can save USD 42 bn in equipment imports by 2030. “In the absence of manufacturing, India will need to import $42 bn of solar equipment by 2030, corresponding to 100 GW of installed capacity,” warns a report by KPMG, an advisory firm. The report further highlighted that solar manufacturing can also create direct employment for more than 50,000 people in the next five years assuming local manufacturing captures 50% domestic market share & 10% global market share.

 

Challenges Affecting Module Manufacturing

There are several factors which contribute to the higher cost of Indian modules, including limited or no access to raw materials, lack of economies of scale, & inverted duty structure. According to a research report – ‘State-level Policy Analysis for PV Module Manufacturing in India’- prepared by a Bengaluru based Think Tank, Center for Study of Science, Tech. & Policy, stated, a module manufacturing facility is not very capital intensive; therefore, raising capital cost is not a big challenge to set up such a facility. Govt.s, both at central & state levels, provides incentives to subsidize the capital investment for module manufacturers. However, the research found that these capital subsidies are insufficient to make domestic manufacturing viable, as its impact is outsized by the other factors responsible for high prices. The research outlines three major challenges as under:

Raw Material Cost: A sig. share (80-90%) of module manufacturing cost is attributed to raw material alone. Raw material for a module mainly comprises cell, glass, encapsulant, backsheet, interconnect ribbon, sealant, junction box, etc. Among these, cell has the biggest cost share of ~70% whereas the rest have a ~30% share. Also, the falling prices make inventories extremely costly.

High Interest Rate: The other challenge for a module manufacturing industry is high interest rate on capital, comprising 12-15% of the total module manufacturing cost. The current interest rates in India are in the range of 12- 15%, which are way higher compared to other countries. This analysis observes that high interest rate on working capital increases manufacturing costs. Access to cheaper working capital loans would help reduce costs.

Inventory Management & Capacity Utilization: As mentioned above, Indian module manufacturers are operating at very low capacity utilization; however the capacity is currently sufficient to cater to the demand. The major reason for this is lack of demand for domestic PV modules & unavailability & limited access to raw material. Therefore, to at least keep their plants running, raw materials are stored in the warehouse. Also, the finished modules need to be kept in the warehouse because of intermittent demand in the market. Therefore, higher inventory levels for raw materials & finished modules increase the operating cost & puts upward pressure on manufacturing costs. More long term contracts with manufacturers could assist in this regard, allowing firms to procure raw material just in time to meet demand. Access to working capital is important for Indian CoS to compete against the firms from China/ South East Asia, who offer better terms.

 

Domestic Solar Manufacturing Scenario

Manufacture of solar panels start with polysilicon, which is made from silicon. Polysilicon is made into ingots, which are cut into wafers. Cells are made with wafers & a string of cells is a module. Today, only modules & cells are made in India, with imported material. When it comes to figures, currently, almost 90% of panels & modules in Indian projects are imported, mostly from China, Malaysia & Taiwan, as they are sig.ly cheaper than the ones made locally. According to the MNRE, the country has installed capacity for producing 3.1 GW of cells & 8.8 GW of modules (cells are used to make modules). Modules account for nearly 60% of a solar power project’s total cost. India’s solar power generation capacity has already more than tripled in three years to over 20 GW. Of India’s ambitious target of putting in place 175GW of clean energy capacity by 2022, 100GW is to come from solar projects. Local manufacturing capacity is anyway nowhere near enough to meet the target of 100 GW by 2022, which has been set by the central govt.. At present, the only incentives available for manufacturing these is the Modified Special Incentive Package Scheme, which is available to all electronic goods manufacturers & implemented by the Ministry of Electronics & Information Tech., but there have been few takers for the scheme.

MNRE has eventually understood the hard core fact that the cell/module manufacturing capacity in the country is obsolete. This is why, MNRE plans to revolutionize this sector by introducing slew of measures to support solar manufacturing in India. In Dec, MNRE introduced a concept note’ to build up manufacturing capacity of solar PV modules, cells, wafers/ingots & polysilicon in India. The Ministry speaks of a direct financial support of Rs 11,000 Cr. & a ‘tech. upgradation fund’, for solar manufacturing. However, concept note highlighted even this capacity is not being fully exploited because of obsolete tech. Only 1.5 GW of cell manufacture & 3 GW of module manufacture are used. Govt. has also come up with one good thing in the recent budget where it proposed that duty on solar tempered glass/ solar tempered anti-reflective coated glass for manufacture of solar cells, panels, modules be reduced from 5 per cent to zero.

 

Growth opportunities in Indian PV Market

Recent studies conducted by leading institutes in India, like IIT Bombay, have shown higher incidences of premature degradation. This is a cause of sig. concern considering the 100 GW vision &bns of dollars funding that are potentially waiting to be invested in India. Notwithstanding the higher rates of interest & local on-ground difficulties, Indian module makers need to establish themselves as globally relevant players through proven performance & consistent quality delivery. DuPont through its extensive field studies across geographies, environments & applications has demonstrated that proven & reliable materials correlate to robust panel performance in outdoor environment. There is a need to understand PQR (proven materials, quality & reliable manufacturing processes) & its importance in sustaining the growth momentum in India’s solar sector. Adherence to strong manufacturing practices, field proven & reliable materials such as DuPont, Tedlar PVF films, the only backsheet materials that has 25+ years proven performance in the field, & DuPont, Solamet metallization pastes setting the pace of innovation, are key to achieving 25+ years of performance. Towards this, DuPont collaborates with industry stakeholders (Developers, EPCs, Module Makersand Financial Institutions etc.) to raise awareness & advocate about the importance & correlation of materials to power generation, system lifetimes & overall LCOE (Levelised Cost of Electricity). 

With solar installations expected to grow at CAGR of 51% over the next 5 years & India’s target of achieving 10% of its total energy mix through renewables by 2022 (IESS 2047), it is imperative to go with the proven leader in advanced photovoltaic materials. What you will get is proven power & lasting value you can count for the long term, for greater peace of mind. India is well prepared for reaping the benefits from the country’s high insolation level & has set challenging ambitions in regard to solar PV renewable energy. The stakes are extremely high for India’s prosperity & the renewables industry must not fail to deliver on expectations. No doubt, to achieve the targets latest tech. & module components will need to be implemented. In terms of maximizing power yield, Agfa’s nextgenbacksheet UNIQOAT contributes directly by offering reflectivity of over 90% - the highest reflectivity of mono-backsheet in the market. Additionally, UNIQOAT adds by-design to the reliability & durability of solar modules: its single layer structure totally eliminates the risk of delamination, a well-known risk associated with traditional multi-layer backsheet. Cost is key for solar PV’s competitiveness & again the mono-layer concept of UNIQOAT offers great potential. It is manufactured in a one-step process with specific functionality added in-line during the PET extrusion process by surface modification. The total backsheet structure consists of one single layer with one surface modified to ensure high adhesion to EVA, reflectivity & UV-blocking, while the opposite side is well armed to face the air environment. The traditional cell side & air side layers are fully integrated in the PET. Today, Agfa’s UNIQOAT is already a valid alternative for the traditional fluoropolymerbacksheet structures & Agfa is committed to continuously develop solutions that target more Watts per dollar- a commitment that is expressed in Agfa’s recently introduced Q-factor. For this, deep scientific insights are required not only about chemistry & polymers but about the sum of effects of the physical, chemical & electrical interactions that take place between the components of module when subject to environmental conditions. It is a complex equation that Agfa feels it is well positioned to solve.

 

The opportunities and challenges of investing in Indian solar

India has an excellent solar resource and a strong pipeline of delivered projects. The country’s government has also previously announced very ambitious solar aspirations as part of its proposed solution to deal with growing environmental challenges and reduce its dependence on fossil fuel imports.

However, as seen in the UK, there’s often a large gap between government aspirations and the policies needed for solar to flourish, prompting some UK solar industry veterans to dub the last few years a ‘solar coaster’.

Nevertheless, the positive case for India continues to build on closer inspection. Firstly, the government has been developing a reputation for business-friendly policies to attract foreign investment. Secondly, it has been tackling the corruption which had tarnished some companies’ experience of working in parts of the country.

The government has also introduced a number of incentives and specific policies to make solar more attractive to overseas investors, including national and state solar auctions, increased investment in the grid and various favourable tax adjustments. As a result, the country has made global headlines for the record low prices being realised in its latest solar auctions.

Conclusion

Solar power is an immense source of directly useable energy and ultimately creates other energy resources: biomass, wind, hydropower and wave energy.

Most of the Earth's surface receives sufficient solar energy to permit low-grade heating of water and buildings, although there are large variations with latitude and season. At low latitudes, simple mirror devices can concentrate solar energy sufficiently for cooking and even for driving steam turbines.

The energy of light shifts electrons in some semiconducting materials. This photovoltaic effect is capable of large-scale electricity generation. However, the present low efficiency of solar PV cells demands very large areas to supply electricity demands.

Direct use of solar energy is the only renewable means capable of ultimately supplanting current global energy supply from non-renewable sources, but at the expense of a land area of at least half a million km.

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