Indian solar manufacturers look to Germany as China proposes curbs on technology exports
New Delhi: China's proposed restrictions on exports of solar manufacturing technologies and equipment have prompted Indian solar manufacturers to look for alternative suppliers, particularly in Germany, amid concerns over the reliability of Chinese supplies, according to three people familiar with the developments.
The proposed curbs may hurt India’s ambitious plan to build a domestic solar manufacturing ecosystem, including the projected 100 gigawatts (GW) of capacity for wafers, ingots and polysilicon by the end of this decade. About 30 GW of wafer and ingot capacity is currently in the pipeline. The draft norms cover technology and equipment used in manufacturing polysilicon, thin wafers and advanced solar cells based on TOPCon, heterojunction (HJT), back-contact and tandem processes, according to media reports and executives Mint spoke with.
“The solution is to diversify technology partnerships and strengthen India’s domestic manufacturing capabilities,'' said Vineet Mittal, chairman, of clean energy and renewable power conglomerate Avaada Group said in an emailed response.
“Germany and other European countries have strong capabilities in solar manufacturing technology, precision engineering and advanced equipment. We are exploring opportunities across international technology ecosystems, including European equipment manufacturers, engineering specialists and research institutions such as Fraunhofer ISE,'' Mittal said.
Exploring alternatives
"The industry response is already taking shape, with European technology suppliers, particularly from Germany, seeing renewed interest from Indian manufacturers seeking alternatives to turnkey Chinese lines," said Prashant Mathur, chief executive officer of Saatvik Green Energy Ltd. "Companies are actively engaging with suppliers such as Centrotherm and RENA Technologies for advanced cell manufacturing capabilities."
"Indian solar manufacturers are increasingly exploring equipment and technology partnerships across Europe, Japan, Taiwan and other markets, reducing concentration risks," said Amit Manohar, secretary general of the Indian Solar Manufacturers Association (ISMA), an industry body representing integrated solar component manufacturers.
"Germany has a well-established solar equipment and technology base, with several experienced suppliers across key manufacturing processes. European suppliers form an important part of a diversified sourcing approach, ensuring greater supply chain flexibility and long-term manufacturing competitiveness," Manohar said.
Higher costs, longer timelines
However, industry stakeholders caution that Germany may not have the capacity to meet the scale of demand from Indian manufacturers. Sourcing equipment from European suppliers could also come at a 40-50% premium, increasing manufacturing costs and delaying the time taken by Indian companies to break even.
"Any alternatives would inevitably mean a significant increase in costs and project timelines. China dominates the global ingot and wafer manufacturing business, along with the associated supply chain. It is not certain whether any other country would be able to cater to the high demand coming from India," said Vinay Rustagi, chief business officer at solar component manufacturer Premier Energies.
"This development points to the acute need for India to become self-sufficient on the technology front. We are hopeful that Indian machinery suppliers will step up in the medium to long term," he added.
Dilip Mehta, director of engineering, procurement, quality, health, safety and environment (QHSE) at renewable power generator Hexa Climate, said European equipment was more expensive upfront and took longer to deliver. However, when the additional cost is spread across the lifetime output of a manufacturing line, the difference in per-watt cost is relatively small compared with the cost of a wafer or cell.
Manufacturers should focus more on polysilicon availability, yield and production throughput than on the initial equipment price, Mehta said.
"Yield is the real variable. Chinese lines are proven at scale. A new line from any supplier needs time to reach its target yield, so the risk to watch is the ramp-up period, not the sticker price," he said.
The impact on the overall cost of renewable energy projects may also be limited, Mehta said. Modules typically account for less than half of a solar plant's capital expenditure. Their share is even lower in hybrid and firm and dispatchable renewable energy (FDRE) projects that combine solar power with wind and storage.