Asia Report: US Accused of Killing India's Solar Energy Industry

Renewable Energy World Editors
August 21, 2012 | 31 Comments

The United States is killing India's domestic solar industry, according to some industry analysts. New Dehli's Center for Science and Environment (CSE) released a report Friday stating that the U.S. Export-Import Bank and Overseas Private Investment Corp. is using a $30-billion fund, fast start financing, set up by the U.N. Framework Convention on Climate Change intended to help developing countries overcome climate change difficulties.

India’s national solar mission specifically states that crystalline photovoltaic projects must use India-manufactured products, while thin-film projects can use parts from other regions. The Ex-Im bank is taking advantage of this rule by offering low-interest loans to Indian solar project developers that use U.S.-manufactured solar cells and panels, according to CSE.

“The major beneficiaries in this case have been American producers such as First Solar and the now bankrupt Abound Solar,” according to the CSE report. India’s domestic solar industry is now in a dangerous state, says the report, with 30 percent facing closure due to low demand.

“The U.S. is engaging in a similar practice [as China had] in India by subsidizing loans for buying American equipment," said Kushal Yadav, head of CSE's Renewable Energy team to UPI.com.

IN THE NEWS

Japan’s IHI Corp. Plans To Convert Calif. Coal Plants to Biomass: Bringing Japan’s renewable enthusiasm to the U.S., IHI Corp., a heavy machinery manufacturer, bought up to 50 percent shares in five California power plants from Exelon Corp., two of which are coal-fired and three are biomass plants. The company expects to convert the two 33-MW coal-fired plants to biomass plants.

China’s Grid-linked Wind-power Capacity Up 87%: China is on track to meet its lofty renewable goal of 15 percent by 2020 as it increased its on-grid wind capacity 87 percent this year. China imposed strict rules for new distributed wind generation earlier this year, requiring projects to connect to its grid systems. It expects its grid-connected capacity to rise to 100 GW by 2015 and 200 GW by 2020.

Trina Solar Sees Lower Margins, Shipments: Feeling the sting of falling demands in Europe and recent trade rulings in the U.S. and E.U., China-based Trina Solar saw margins “far below expectations” in the third quarter. Trina reported its fourth straight quarterly loss and said it expects its margins to continue to shrink in tandem with falling prices. Trina also cut its expected shipments to 1.75-1.80 GW from 2.0-2.1 GW in response to decreasing demand.

India Boosts Solar Subsidies for Residential Solar: In the wake of its record-breaking blackout, the Odisha Renewable Development Agency (OREDA) introduced a subsidy for residential solar installations in India. OREDA is encouraging solar adoption to decrease the devastating impact of India’s blackouts. According to its deputy director, a 1-kW system is Rs. 2.5 lakh (US$4,500), and costs the consumer Rs 1.7 lakh (US$3,000) after the Rs 80,000 ($US1,400) subsidy.

China Hydropower Company Sees Record Results: China Hydroelectric Corporation, which owns, develops, and operates small hydropower projects, announced a record 72% increases year over year for its second quarter. The company said its success is due to favorable precipitation, higher tariffs for many of its projects in the second quarter, and an improved lending market.

ON THE HORIZON

Japanese Solar Outlook Looks Bright but Wind May Not Fly: Japan has set high goals for renewable energy, aiming for 35 percent by 2030 in the wake of the Fukushima disaster. It recently implemented aggressive feed-in tariffs to achieve its goal, sparking new renewable energy projects. But due to new wind-farm guidelines introduced last year, environmental barriers may hold back extensive wind project development.

Heavy Debts Set China Solar Manufacturers Up for Consolidation: Experts believe that the solar industry is headed for “profitless prosperity” as Chinese solar companies are struggling with debt and falling demand. Expect to see more small companies closing their doors along with mergers and acquisitions that continue to shrink the landscape as companies continue to post red ink on their quarterly records.

A DEEPER LOOK

Writing on the Roof: Competition for Electric Utilities: Diverse competitors from energy companies to local schools, are becoming competitors for electric utilities. Why? They are installing their own renewable energy sources and reaping the benefits. But if utilities delve into the world of distributed generation, will it be enough to encourage widespread renewable energy adoption?

A123’s Deal with China’s Wanxiang May Pump Short-term Value into Its Stock: Wanxiang’s $450 million deal with A123 is likely to go through, saving the lithium-ion battery manufacturer from probable bankruptcy. If all goes according to plan, Wanxaing will control 80 percent of the company, which is about 680 million shares, and experts believe AONE stock will jump to $0.55 a share from its current $0.48 value. And if the deal is blocked, Wanxiang has expressed interest in buying AONE at $0.55 a share regardless. Though this would make for good short-term gains, experts still suggest to keep a close eye on its volatility.

QUOTE OF THE WEEK

U.S. Using Funds to Enter India Solar Market

“Interestingly, the U.S. government has put anti-dumping duties on solar equipment imported from China because of the alleged subsidies that China is giving to its solar manufacturers. However, the U.S. is engaging in a similar practice in India by subsidising loans for buying American equipment.” -- Kushal Yadav, Head of Renewable Energy, CSE

HAVE YOUR SAY

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IN CASE YOU MISSED IT

Aug. 6-Aug. 20, 2012 Asia Report: South Korean Solar Companies Make Strong Push Into U.S. Market
July 23-Aug. 6, 2012 Asia Report: World Takes Hard Look at India Grid, Promises of Solar
July 16-23 , 2012 Asia Report: Japan Taps Into Promising Geothermal Potential
July 2-16, 2012 Asia Report: The Dawn on Japan’s Offshore Wind Era
June 25-Ju ly 2, 20120 Asia Report: Japan Enters Renewables Era With Major Developments
June 18-25 , 2012 Asia Report: Toshiba Plans Japan’s Largest PV Plant
June 11-18 , 2012 Asia Report: U.K.-Korea Unite Behind Offshore, Tidal Potential
June 4-11, 2012 Asia Report: As EU Trade Case Looms, Market May Shift East
May 21-29, 2012 Asia Report: China’s Solar Giants Unite to Confront Tariff
May 14-21, 2012 Asia Report: Solar Stocks Tumble After Solar Ruling
May 7-14, 2012 Asia Report: Solar Dumping Announcement Set for May 17
May 1-7, 2 012 Asia Report: European Ruling Could Cut Into Palm Oil Exports
April 23-30 , 2012 Asia Report: U.S., India Strike $125 Million Investment Deal
April 16-23 , 2012 Asia Report: Japan Solar FiT Likely In Line With Industry Request

Lead image: Cloudy solar panel via Shutterstock

31 Comments

ANONYMOUS
August 27, 2012

The main reason solar technology has not penetrated Indian market is due to lack of vision among Indian politicians who are embroiled in corruption scandals. Although wind and solar energy are cheaper than nuclear energy, Indian government is foolishly planning to build several new nuclear power plants. India is poorly equipped to handle huge nuclear disasters like Chernobyl and Japan.

There are many Indian towns and villages with inadequate power supply, while we can get solar lanterns for about $20. Solar water heaters cost about $300-$400 which is affordable for most middle class Indians. In some Indian cities like Bangalore and Mysore, it is mandatory to have solar water heaters for all new houses. Today, solar PV systems cost about $3000 which is about 2% of cost of typical house in urban India. The cost of solar energy is dropping by 20-30% every year. Therefore, Dr. Jagadeesh's comment that solar energy is unaffordable for Indians is simply not true.

China did not have any solar industry worth mentioning, just seven years back. Now, due to aggressive support from the government and vibrant entrepreneurship, China has brought down the cost of solar energy drastically and is leading the world in solar energy development. What India needs is bold vision and quick action by the government and entrepreneurs, which has started happening in states like Gujarat. Hopefully, solar and wind energy will be harnessed on a large scale, reducing the dependence on fossil fuels and benefit the environment and economy.

ANONYMOUS
August 27, 2012

"Solar concentrated power is not cheap and unsuitable except in desert conditions" (Comment 22). Just as the Niagara Falls in a small location produces enough energy cost effectively for distribution to a wider region, desert conditions existing in many parts of the world can produce enough solar power for distribution to wider areas. The longevity of these sources ( billions of years ) out weighs many other limitations....

V G SHENOI
August 27, 2012

Silly tiff between Anumakonda and Bob_Wallace - Bob Wallace has a point - location, location - key to any power solution and all forms have their place within the mix - however wind is the most commercially proven technology which is affordable and of course investors won't install them where the annual energy potential is low.

As with wind and other renewables, solar is intermittent but perhaps slightly more predictable although in large interconnected systems wind power will be available day and night.

I suppose India needs all forms - note the weakness of the grid, and consumption exceeding supply by a wide margin - but cost is a key factor in all such decisions and solar is pretty expensive and takes over scarce land, also the seasonal variations.

Industry of course would push for what is good for their profit - and Government can only subsidise what will bring in quick results - it would be a political decision one way or the other - so stop fighting like children.

Bob Wallace
August 27, 2012

Of course I will write no more and waste your precious time.

Better yet, I will write what I think might be useful to others and you can save your precious time by not reading my posts. Nothing will be lost since you can't find time to answer my questions....

Anumakonda Jagadeesh
August 27, 2012

Dear Bob_Wallace:

Why do you think I am against Solar? Infact I am strong supporter of All Renewables and more so solar. My Angush is how public money is to be spent on technologies for development. Everybody agrees that Solar Power generation is expensive and so is its efficiency at present compared to wind and micro and mini hydel.

For your information there is slight increase of tariff for wind power generation in the last 10 years. Unless the wind turbines were economically feasible, Private investors would not have gone in such a big way in India?

Perhaps you will be surprised several of my SOLAR GADGETS (Simple) were highlighted by leading journals in Renewable Energy.

Let us have a pragmatic approach (not biased) to promote all Renewables.

I hope you won't waste your time by writing further(which is of no use) and waste my precious time!

Yours SOLARly if not WINDly,

Dr.A.Jagadeesh Nellore(AP),India
Wind Energy Expert
E-mail: anumakonda.jagadeesh@gmail.com

Bob Wallace
August 27, 2012

I bow slightly to you as I tug my forelock....

Now, dear Doctor.

How many wind turbines were connected to the Indian grid at the same moment? Did you really start with more than one?

What was the price of wind-generated electricity 30 years ago and today?

Perhaps you should self-deflate and learn something about solar. The world's future grids are likely to be supplied by a mix of inputs, very few countries will utilize only one input. Solar makes a huge amount of sense for India because it is fairly low tech to install and produces during peak demand hours.

Anumakonda Jagadeesh
August 27, 2012

Bob_Wallace

By the by ARE YOU A SOLAR EXPERT?!

I hold a Ph.D in Wind Energy from the most prestigious Institute in India. India if not the world knows my contributions to the Wind energy Growth in India since 80s! You are ignorant of Wind Energy Developments in India.
Dr.A.Jagadeesh Nellore(AP),India
Wind energy Expert
E-mail: anumakonda.jagadeesh@gmail.com

Bob Wallace
August 27, 2012

Why would you ask a low level question like that if you are truly a "wind expert"? You must know the price history of wind and solar.

You must also know the growth history of wind in India. It started with one turbine being connected to the grid. At that point in time the future of wind was a "MYTH!". Wind made sense, wind grew.

Solar will make sense in India just as it is making sense throughout the rest of the world. Solar has a unique advantage in that an individual can set up a small system for modest money and start enjoying the benefits. That is what is likely to make solar very successful in India.

Anumakonda Jagadeesh
August 27, 2012

Dear Dr.Bob_Wallace:

If wind is localised and solar is not(in India) how is it that Wind power installations are 16078 MW while Solar PV 200 MW capacity equivalent off-grid solar applications and 7 million square meter solar thermal collector area till March, 2013!In India Cell phone is a revolution while solar is a MYTH!

Dr.A.Jagadeesh Nellore(AP),India
Wind Energy Expert
E-mail: anumakonda.jagadeesh@gmail.com

Bob Wallace
August 26, 2012

Wind, according to Indian wind maps, is somewhat localized. Sunlight is not.

Wind is a large, centralized power solution. Turbines can be installed close to places where the grid runs and provide power. That's a good thing.

Solar is unique in it's ability to move far from the grid. India has such a massive need for grid that it's likely that solar will be like cell phones, a leap-frog over old tech.

(Dr. Bob ;o)

Anumakonda Jagadeesh
August 26, 2012

Mr. Bob_Wallace:
Wind is seasonal everywhere in the world(India is no exception), it won't blow for all 365 days. Available Windy sites are enough to harness this clean energy.

I am not against solar. Bloody simple BOX TYPE SOLAR COOKER which has been there since 50 years is yet to penetrate to rural areas!

Yes. Simple applications of Solar lighting using LEDs using Solar Charging are good for rural India. Solar water heaters are ideal for a sunny country like India. I was in Denmark working in Renewable Energy for a couple of years where I find Solar water heaters in use even though the highest temperature in Summer won't go beyond 25 Degrees Celsius while the minimum in December in South India has been 30 Degrees Celsius! Using Geysers to heat water is wasting high grade energy like electricity for a low grade purpose like water heating. Gas and Solar Water heating is better.

Solar disinfection for safe drinking water, solar driers and other simple applications of solar are boon to rural areas in Developing countries. I designed many solar and other Appropriate Technology Gadgets.

Solar PV is still a far cry in developing countries which face paucity of funds until more efficient solar cells enter the market. Can't we have patience for couple of years!

Dr.A.Jagadeesh Nellore (AP),India
Wind Energy Expert
E-mail: anumakonda.jagadeesh@gmail.com

Bob Wallace
August 26, 2012

Is not wind a somewhat seasonal energy supplier in much of India?

Let's not lose sight of the fact that solar has become relatively cheap only very recently. It will take a bit of time for that enormous price drop to work its way into increased installation rates.

What I think may be major in India is distributed solar. If, as it seems, cell phone companies are going to finance and sell very small solar systems as a way to increase their call revenue, then the rate of installation may soar past anything we've seen in the past.

Hundreds of millions of people installing a small panel, a few LEDs and charging their cell phone. Perhaps a radio. And for less than what they now spend for kerosene and candles. I cannot see how this will not be a raging success. Who will not spend less to get more?

Those mini-systems will get paid off and people will start thinking about a TV or one of the $35 tablet computers and systems will grow.

If one of the developing battery technologies such as Aquion's sodium-ion battery (roughly same price as lead acid with many times as many usable cycles) comes to be then it really be Katie-bar-the-door.

Or perhaps Kadhiroli-bar-the-door....

Anumakonda Jagadeesh
August 26, 2012

Why so much hype for Solar Energy (PV) in India? Under Jawaharlal Nehru National Solar Mission the target will be 20,000 MW by 2022. That means on an average 2000 MW per year. But during 2011 -2012 only 153 MW grid solar power projects were in place, a case of HIGH PROMISE AND LOW PERFORMANCE! The present efficiency of solar cells in the market is very low (about 15%) while the cost of generation of solar power high. On the other hand Wind power is cheaper than Solar PV and efficiency also high. The installed capacity of Wind in India at the end of December 2011 was 16078 MW.Given the investment in Solar and the projected 20,000 MW by 2022; for the same capacity Wind farms can be set up at half of the cost and in half of the time! Neighboring China which entered in Wind power field in 2003 is world leader with 62,400 MW!

It is all public money that goes into Jawaharlal Nehru Solar Mission. Past experience shows where ever there are subsidies and incentives (without matching to production) there was much misuse. Let us hope Precious public funds goes to power projects which really supplement POWER!

Dr.A.Jagadeesh Nellore(AP),India
Wind Energy Expert
E-mail: anumakonda.jagadeesh@gmail.com

Dnyaneshwar shinde
August 26, 2012

Inhouse manufactureres should be encouraged by suitable finance help starting from now sothat in near future solar manufaturing costs willl be reduced in India.R&D for solar should be taken more seriously which will help for solar cell cost reduction.Govt is going in the right directions .One can not expect results like solar Grid parity overnight.Every Indians should support the solar activities.States should support centre.Manufacturers of solar technology ,Financial institutes and researchers must go hand in hand for use of abundant solar energy as an alternate energy source. Dnyaneshwar Shinde India

V G SHENOI
August 23, 2012

Solar concentrated power is not cheap and unsuitable except in desert conditions. Check how far the cost/utilisation in the US.

Apart from some desert locations, India may not be suitable although smallscale - solar cookers, fridges, etc, where intermittency/seasonal variations can be managed - are already in the market.

Solar PV as a general rule requires a fair amount of roof area as well. Solar hot water heating is fairly widespread.

ANONYMOUS
August 23, 2012

" India's domestic solar industry is now in a dangerous state, says the report, with 30 percent facing closure due to low demand. " - It is interesting how this is phrased. Low-demand at a certain price.. The demand is there, when you read about the outages and the rationing programs.. Why does the CSE ( Center for Science & Environment ) does not encourage the relatively low-tech thermal concentrated solar power (CSP) to create the solar utility-grids and meet the demand that exists at lower costs?

V G SHENOI
August 23, 2012

NickDalacu - Shyster? corrupt millionaire? ??? in this context.

increasing tension and oppression?? already the die is cast for that - population ballooning, and resource depletion - the world and its economic/political systems not sustainable beyond a few decades/centuries at the rate we are consuming.

India's population - 1.2 billion and going up - they need to look at controlling that and also getting the basics for everyone rather than high-tech/high consumption route that the West has taken over the past 2 centuries and now coming unstuck. The earth is a very polluted planet, and mankind has to look at turning back economic and material growth based on increased consumption.

V G SHENOI
August 23, 2012

Bob_Wallace - where there is a need, the market will step in I am sure.

Before electricity, people went to bed by sun down and got up with the sun. I am sure if the is that great people in rural India will find a solution - they already do.

Bob Wallace
August 23, 2012

" leaving such equipment out for charging in close packed slum dwellings is inviting them to be stolen."

I'm continually amazed by the ingenuity of people to create jobs for themselves. It's not hard to imagine neighborhood lantern tenders who gather up the lanterns at daybreak and return them charged in the evening.

A small jump for people who move hundreds of thousands of dabbas/tiffins from home to office and back to home each day.

Here's the product description of a $16 solar lantern I found on Amazon.

"d.light S10 is a bright and durable replacement for flashlights, battery-powered lanterns, candles, and kerosene lanterns. It is 3 to 5 times brighter than a kerosene lantern, and is built to survive tough conditions, including accidental drops onto hard mud or concrete, rainshowers, and intense heat and dust."

Local grids fed by wind and solar would be great. But simple solution such as solar lanterns are quicker to bring change to people's lives.

V G SHENOI
August 23, 2012

Yes I have read books under a kerosene lantern. Also appreciate modern LED lights give adequate light for close work - that said, you have hit the nail on the head - getting such equipment made cheaply, also the solar panels, batteries, etc, of sufficient robustness/longevity under the tropical rough conditions.

The solar lanterns on offer with say a 4V, 4Amp battery rating is quite pricy, also the charging panels need many hours of full sun light charge for a few hours work, larger panels will bump up costs.

And India although in the tropics is not always sunny - and leaving such equipment out for charging in close packed slum dwellings is inviting them to be stolen. It may be more practical at rural locations - and already being marketed.

A more practical/useful renewable solution for rural communities - communal PV installations - large enough to supply basic lighting needs, and also power for mobile phones. Once again capital cost and maintenance under the rough conditions to be expected - is the difficulty. India has millions of villages/rural communities that need basic power.

Bob Wallace
August 23, 2012

I can assure you that a solar lantern is a very useful device.

Have you ever tried reading or doing chores with kerosene light? Have you ever spent time in a room lit by kerosene? I have. It is not something I want to do again.

Sparing $20 for a solar lantern is not the issue. Poor people spend a lot for kerosene. The issue more likely is getting that $20 together to make the purchase. A program that lets people buy solar lanterns or small solar systems on time and pay them off with money saved from kerosene purchases is the solution.

V G SHENOI
August 23, 2012

Anonymous if you can afford to buy a house worth 82.5 Lakhs, you must be wealthy - doubt if people struggling to make both ends meet would spare $20 for a solar lantern assuming it is a useful device.

If wealthy people paid their taxes and the tax authorities were able to cut down evasion, and black money and civil servants, and politicians become a little less greedy/corrupt, there would be plenty of money for looking after the needy, and subsidise technological and social development. In the mean time India has many other priorities over solar electricity.

ANONYMOUS
August 23, 2012

Indian government should be massively supporting development of solar energy technology in India, just as China, Germany and US are doing. Currently, 2KW solar system costs about $3000 (Rs.165,000) which is about 2% of the cost of house, which is easily affordable for middle and upper income Indians. Low cost solar lanterns which cost about $20 (Rs 1100) is easily affordable, even for low income Indians. Indian government should be setting up solar technology parks which would further drive down the cost and lead to wide spread utilization of solar energy in India.

V G SHENOI
August 23, 2012

From your comments you appear to be smarting that your subsidy is withdrawn - ultimately there are no solutions technological, or economic to the problems arising from ballooning world populations, and depleting water, mineral and energy resources - solar PV is a high cost option, intermittent, limited in scale and useful as part of the energy mix - the world does not owe technologists anything - technology is only a tool to serve needs and over the past 200 years more or less destroyed the earth by exploiting its resources, and in turn responsible for increasing populations. It is the taxpayers who provide subsidies - and no automatic right.

V G SHENOI
August 22, 2012

regrettably the market determines the price - if US subsidy for their product is hampering competition - this needs to be dealt with under prevailing trade arrangements between India, and the US - what are WTO rules.

Technological innovation on its own is meaningless unless it is led by strong market drivers.

Bob Wallace
August 22, 2012

Anon - "India should develop most economical solar energy solution, which at present, is poly crystalline and mono crystalline panels. India should not be forced to use more expensive thin film solar films."

Thin film solar is cheaper than Indian-produced mono crystalline. That's the point of this article.

If India can make mono-crys cheaper than they can import thin-film then they will quit using thin-film.

Bob Wallace
August 22, 2012

Solar PV is not at all an expensive luxury for India.

India generates a lot of its electricity with diesel. Solar has already reached diesel parity in India. Solar is now cheaper than new coal production in India.

Pranab Duttaroy, PE, CEM, MBA
August 22, 2012

This email is more to the attention of policy makers in recent JNNSM (Jawaharlal Nehru National Solar Mission) projects.
PV (including other renewable energy systems) manufacturing in US was largely supported (still being financed) with government subsidies, tax credits and likes.
Also government made sure that contractors install US made renewable system components in each public project. This obligation was specially printed in the project scope of work.

Policy makers should be smart enough to understand the likely scenarios and should have specified similarly. If not, they should not complain because project builders actively embraced attractive deals that was promoted by US Exim Bank, OPIC etc.

David Carl
August 22, 2012

No one is forces anyone to do anything. The US import export bank is set up to develop US jobs through international trade. If you don't like their rules find someone else to finance your project. They are not the only lender in the world.

ANONYMOUS
August 22, 2012

India should develop most economical solar energy solution, which at present, is poly crystalline and mono crystalline panels. India should not be forced to use more expensive thin film solar films.

V G SHENOI
August 22, 2012

Indian Solar PV - One assumes the US is playing within rules - if not India should complain through appropriate mechanisms.

Nothing stopping India offering finance for Indian installers and getting their production costs down.

Solar PV on the other hand is an expensive luxury for India - and need to look at cost economics much more carefully for alternative generation.

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Renewable Energy World's network editors help deliver the most comprehensive news coverage of the renewable energy industries. Based in the U.S. and the UK, the team is comprised of editors from Pennwell Corporation's myriad of publications...