India has envisaged solar PV technology for half the capacity addition in the first phase of the National Solar Mission. However, Indian banks remain wary of financing solar projects. Edwin Koot, a solar PV expert and CEO of Solarplaza, the Netherlands-based global solar energy platform, shares his perspectives on the emerging Indian market, in an email interview with FE?s Noor Mohammad. Excerpts:
Can India can become a manufacturing hub for PV solar equipment?
It is my belief that India will grow into one of the world?s biggest markets for solar energy within 10 years. This means there is huge industrial potential. Of course, import of solar products and modules can be considered. But as other markets also grow, there will be potential for more industrial actors. Besides, looking at solar crystalline modules, for example, these are actually glass plates with a small layer of solar cells. It may make sense to import the cells and assemble these into modules locally. This would help avoid the transportation of glass plates around the world. But even more important, most jobs will be created downstream in the supply chain. Today, the manufacturing capacity of solar products in India might be insignificant, but that would change drastically once the market starts booming. China?s solar industry grew from a global market share of a small percent to the world?s largest supplier in less than ten years. So, why India cannot create a strong domestic market and industry?
What technologies are the best suited for India?
Both crystalline and thin-film are suitable technologies for India, each with its own advantages. Thin-film is a very thin semiconductor-layer of silicon, cadmium telluride or copper indium selenide on a substrate like glass. The crucial advantage with this technology is that the production cost of these thin-film panels is cheaper than crystalline silicon panels. A disadvantage is the lower cell efficiency. That means you need more space and panel surface to realise the same amount of power. If the cost of space and structures to mount the panels can be reduced, thin-film would become more attractive than crystalline silicon panels. The latter still dominate the global market with an 85% share. Both technologies have their advantages in different applications and rather than in competition, both will stay around and grow.
How can India cut production costs across the solar PV supply chain, on a fast track basis?
The best way to reduce the cost is to increase the production volume. The price of solar modules has come down by almost 50% in the last three years. This was possible due to the enormous growth of the production volume from big manufacturers. To speed up cost reduction across the supply chain, it would be necessary to stimulate mass production by creating a mass market. Competition will force major industry players to invest in more R&D, leading to higher efficiencies and ultimately lower prices. A mass application of PV systems will stimulate cost reductions in manufacturing and design, and optimise installation.
What policy changes are required in India to make solar PV-generated electricity grid competitive?
A policy focused on large-scale market application. For this, the financing of the PV system application will become a crucial issue. PV systems hardly have any cost for operation and maintenance, so the cost of capital will be significant. A PV system will last 20 years or more. Especially with the high interest rates in India, there is a lot to win. The commercial Indian banks need to have confidence in the solar technology, and trust its reliability over a long period. This can be stimulated with low-interest government funding for these projects.