The outbreak of Coronavirus in China has put a major dent in the Indian solar industry. Since the solar industry heavily depends on China for equipment imports, it is undergoing price pressures which may squeeze solar players working under Narendra Modi’s 100 GW solar mission. The restriction on shipments is also likely to push the deadline for the ongoing projects. While traders want to keep the margin on a higher side, the compact supply has become another reason for the higher prices. “India’s solar industry is definitely hit but it is on its way back to recovery. However, the paranoia created has affected much more than what was expected,” Puneet Goyal, Co-Founder, Sunalpha Energy, told Financial Express Online.
If the rates were to increase by 1-2 per cent, it has increased by up to 10 per cent due to paranoia. Since we are at the end of the value chain, we are hit the worst, he added. The estimates say that China, Taiwan, and Malaysia supply 80 – 90 per cent of India’s solar panels. Thus, if the supply is stopped for India, the ongoing projects in the country may have to wait for a longer time for completion.
“The outbreak of this novel virus is hampering businesses around the world, especially the supply chain. Consequently, the solar industry is also not untouched as some shipments are getting stuck thereby delaying the projects in India,” said Gagan Vermani, Founder and CEO, MYSUN. A large share of equipment (solar photovoltaic (PV) panels, raw materials, etc.) is imported from China and this is going to have a spiraling impact on the economics of the on-going Projects too, he added.
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One solution to filling the gap created by the low imports of PV modules could be increasing domestic production. However, for the production in India too, the raw material has to be imported. “PV module manufacturing in the domestic market is also hit due to the fall in solar cell imports, which is a raw material,” Sushil Sarawgi, Managing Director, KOR Energy (India), told Financial Express Online. In the month of March, the demand remains high and at this peak time, the crisis of solar cells may hit the most and push the deadlines of the ongoing projects, he added. He further added that the prices may reverse in the coming quarter.