$30 Billion Question: Can India Reduce Its Reliance On Chinese Solar Goods

India’s aggressive renewable energy goals have set in motion an extraordinary transformation in its energy sector, as it aims to reach 500 GW of non-fossil fuel capacity by 2030. Unfortunately, India’s heavy reliance on imported solar equipment from China poses a substantial roadblock; estimates indicate imports could hit $30 billion per year by 2030, with China serving as its main supplier. With efforts underway to reduce dependence, one must ask themselves: can India truly break free of its dependence?

Reducing India’s dependency will require more than policy adjustments. By 2030, India will need substantial investments in domestic renewable energy capacity, along with technological innovations and international collaboration to build a sustainable solar manufacturing ecosystem. Let’s explore this in detail.

renewable energy capacity

 

Why Does India Rely So Heavily on China for Solar Equipment?

1. China’s Dominance in Solar Sector

China has long been recognized as an industry leader in solar manufacturing due to its large-scale production capabilities, cost-efficient supply chain, and significant investment in research and development. Chinese firms currently account for nearly 80% of solar panel and module production worldwide. 

2. Lower Production Costs

Chinese solar goods tend to be significantly less costly than domestically produced ones due to economies of scale and state subsidies in China. A study found that Chinese solar panels have a minimum sustainable price (MSP) advantage of $0.28 per Watt over US and India solar panels. Chinese firms also boast superior raw material sourcing processes and more efficient supply chains, keeping prices at a more affordable level than domestic competitors.

3. Limited Domestic Manufacturing Capacity

India’s domestic solar power capacity manufacturing sector lacks the infrastructure and scale needed to produce large volumes of equipment. Solar energy continues to dominate India’s renewable energy landscape, showing remarkable growth and technological innovations. As of August 31st 2024, India had amassed an incredible total solar capacity of 89.43GW from utility-scale PV, 13.89 GW grid-connected rooftop projects, 2.59 hybrid hybrid projects (solar component), and off-grid solar PV.

Challenges in Reducing Dependency on Chinese Solar Imports

India faces many barriers when reducing dependence on Chinese solar goods imports and boosting  india’s renewables expansion, most arising from existing constraints in its solar manufacturing ecosystem.

1. Inadequate Production Capacity

India’s solar equipment import bill could potentially reach $30 billion annually by 2030 if domestic manufacturing fails to rapidly scale up. Unfortunately, building large-scale facilities requires significant investments and infrastructure development projects, leaving domestic producers without enough resources or funding to increase production to meet national needs without resorting to imports.   

2. Competitive and Affordability 

Chinese solar products often boast lower costs than similar Indian-produced goods, making them particularly competitive and affordable in India’s cost-sensitive market. Even as Indian companies build production capacity, matching the cost-effectiveness of Chinese goods may prove challenging until similar economies of scale can be realized here.

3. Supply Chain Constraints

Building solar panels requires certain raw materials, such as polysilicon, that India currently imports. Sourcing these materials domestically would involve developing an entirely new supply chain – something time-intensive and costly that might make localization of solar production challenging.

4. Technology and Innovation Gap

India has made notable progress in the solar sector, reaching towards India’s renewable energy target 2030. However, a technology gap with China still exists. To compete with China’s high-efficiency and innovative solar products, India must invest heavily in research and development. By focusing on creating advanced and cost-effective solar technologies, India can lessen its reliance on foreign products.

Steps India Is Taking to Reduce Dependence on Chinese Solar Goods

In response to these challenges, India’s government has implemented several initiatives designed to encourage domestic production, reduce imports and foster self-reliance for solar manufacturing.

1. Imposing Import Duties

One effective strategy to curb imports is through import duties. Introduction of BCD on solar cells at 25% and modules at 40% is a measure to discourage imports and encourage local production. 

2. Production-Linked Incentive (PLI) Scheme 

India’s Production-Linked Incentive (PLI) scheme aims to boost domestic manufacturing by offering financial incentives for companies that establish large-scale solar manufacturing facilities. Companies receiving financial support under this initiative receive rewards based on production volume and efficiency standards.

3. Investing in Technology Development

India is actively building up its technological capacity within the solar sector. Government programs and partnerships with research institutions are working to enhance the efficiency and quality of Indian-made equipment.

4. International Collaboration and Partnerships

India is seeking partnerships with countries like the US, EU, and Japan to construct large-scale solar manufacturing facilities and encourage knowledge transfer. Partnering with these nations gives India access to advanced solar technology and best manufacturing practices from other nations.

Hartek’s Role in Increasing Renewable Energy Capacity 2030

HARTEK Solar – Renewable Energy arm of HARTEK Group and a premier rooftop and floating solar provider

We are also involved in a grid connectivity project offering 10GW+ Solar Grid Connectivity.

HARTEK Solar is a renewable EPC company that has completed 120MW+ Solar Rooftop Installed Capacity

We are among top 10 EPC companies 

We are also among top 4 Solar EPC in India

Our efforts align with India’s goal of building 500 GW of renewable capacity by 2030, helping achieve national sustainability objectives.

Conclusion

India’s journey toward decreasing its dependence on Chinese solar goods can be daunting but has great promise. The Hartek Group, is one of India’s fastest growing company with offerings that span across Engineering, Renewables,Technology, Construction, Fuel and Manufacturing. Hartek’s Vision 2030 aspires to double solar grid connectivity by advancing distributed solar solutions while targeting ₹10,000 crore in revenue. This strategic vision aligns seamlessly with India’s renewable energy goals, solidifying Hartek’s position as a frontrunner in driving the transition to sustainable and cleaner energy solutions. With this, we are aiding in India’s renewable energy target 2030

FAQ’s:-

1. Why does India rely on China for solar equipment?
India imports solar equipment due to China’s cost efficiency, large-scale production, and advanced technology.

2. What challenges does India face in reducing solar imports?
India struggles with production capacity, supply chain gaps, affordability, and technology constraints in solar manufacturing.

3. What is India doing to boost renewable energy self-reliance?
India has introduced import duties, the PLI scheme, and international partnerships to enhance domestic solar manufacturing.

4. How does Hartek contribute to India’s renewable energy goals?
Hartek Solar supports India’s 2030 renewable energy target with EPC solutions, grid connectivity, and solar rooftop installations.

5. Can India achieve its 500 GW renewable energy target by 2030?
With investments, policy support, and technology advancements, India is on track to meet its ambitious renewable energy goals.

What Steps Can India Take to Reach 500 GW of RE Capacity by 2030?

India has set an ambitious target to deploy 500 GW of Renewable Energy capacity by 2030, signalling their commitment to sustainable energy solutions and global climate leadership. This ambitious goal represents our nation’s recognition of solar power’s transformative potential to address energy security, environmental sustainability and economic development. India’s installed renewable energy capacity has expanded by 165% over the previous decade, growing from 76.38 gigawatts (GW) in 2014 to 203.1 GW in 2024. 

Due to the massive scale of projected solar capacity expansion, an inclusive approach must be adopted that encompasses policymakers, industry stakeholders, research institutions, and global partners.  Hartek Group, in this case, a well-known Indian solar EPC company, has made substantial contributions to the Solar Revolution in India.

Since its foundation in 1991, Hartek Group has successfully contributed to increasing RE capacity especially focusing on Solar Power Projects. This blog article will look at the essential initiatives India can take to achieve renewable energy capacity by 2030 and our contribution to the same.

Indian solar EPC company

Steps to Achieve Renewable Energy Capacity by 2030

1. Policy and Regulatory Framework

A strong and consistent policy framework is critical to attracting investment and accelerating solar development. India must maintain regulatory clarity, shorten clearance procedures, and give long-term policy stability to solar companies. 

India could explore extending its current incentive programs and experimenting with new finance structures such as green bonds and carbon credits. According to a report by the (IRENA), government incentives such as subsidies, tax exemptions and concessional loans can significantly lower solar project costs by 30-50% or more.

Land acquisition and grid interconnection difficulties need to be addressed for large-scale solar projects. To meet the increase in solar electricity, India must simplify land acquisition procedures and invest in grid infrastructure upgrades. This involves increasing transmission capacity, improving grid stability, and creating smart grid technology.

2. Technological advancements

India may encourage innovation by investing in research and development of innovative solar technology. This involves looking into novel materials, increasing efficiency, and creating cost-effective storage options. By assisting research institutes and entrepreneurs, India can accelerate technical developments in the solar industry.

Promoting home production of solar components may minimise reliance on imports, generate employment, and enhance the local economy. India may provide incentives and assistance to indigenous producers to stimulate development in the solar value chain, which may help reduce the total cost of solar installations.

Integrating solar electricity with energy storage devices may help improve grid stability and alleviate intermittency concerns. India may incentivise the implementation of solar-plus-storage projects and investigate novel storage technologies such as battery storage, pumped hydro storage, and compressed air energy storage.

3. Investment and Financing

Using public-private partnerships may attract large investments in solar projects. India can foster a favourable climate for PPPs (Public-Private Partnerships) by establishing clear norms, risk-sharing arrangements, and long-term contracts. This may assist in raising private money and speeding up project development.

Issuing green bonds may help solar projects raise cash from both local and foreign investors. India can establish a strong framework for green bond issuance and a thriving secondary market. This might offer a long-term source of finance for solar installations.

Collaboration with overseas partners may lead to increased access to money, technology, and experience. India may seek collaboration with wealthy nations, international organisations, and foreign investors to help it achieve its solar ambitions. This may also assist in increasing foreign direct investment in the solar industry.

4. Human Resource Development

Developing a qualified staff is critical to the effective deployment of solar projects. India must invest in training programs and educational institutions to create the required skills and competence. This covers courses in solar project management, engineering, installation, and maintenance. 

Improving the capability of government agencies, utilities, and industry leaders is critical to successful solar project administration and operation. India may provide training and capacity-building assistance to appropriate parties, which may help guarantee that the solar industry has the required competence to accomplish its ambitious net zero emissions goals.

net zero emissions goals

5. Environmental and social considerations

Conducting rigorous environmental impact studies is critical to ensuring that solar projects are implemented responsibly. India may develop strong criteria for environmental evaluations and prevent any possible negative consequences, such as habitat loss and water consumption.

Engaging with local communities is critical for establishing social acceptability and resolving concerns about land usage, environmental effects, and economic rewards. India can create transparent consultation systems that promote meaningful community participation in project development. This may help increase confidence and support for solar projects.

Hartek Group: A Powerful Force in India’s Solar Revolution

Hartek Group has emerged as a vital participant in India’s solar energy market, boosting solar capacity India, and fulfilling the ambitious goal of achieving 10 GW of Solar Grid connectivity till date. Furthermore, here is how we are contributing in strengthening the green corridor –

Hartek Group, a leading participant in the EPC industry, has acquired various 765kV contracts from the Power Grid Corporation of India Ltd. The important orders include the delivery and commissioning of high-voltage transmission projects in Indore and Kurnool. With massive power production projects planned till 2030, these 765kV efforts will be critical in strengthening the grid. 

Noteworthy contributions in increasing Power Sector in India:

  • 10 GW Solar Grid Connectivity 
  • More than 200 MW installed roof top solar capacity.
  • 21 plus indian state operations
  • 765 KV operational capacity
  • 350 plus EHV and HV substations executed

India’s ambitious target of reaching renewable energy capacity by 2030 requires a concerted effort from all stakeholders – government, industry, academia and civil society alike. By adopting comprehensive policies, incentives and initiatives designed to foster solar energy growth, India can harness its immense potential and become a world leader in renewable energy production. By driving the solar revolution forward through strategically implemented strategies and actions, India can ensure that future generations enjoy sustainable and green futures. India can change its energy landscape through cooperation between innovative businesses such as Hartek Group and all sectors within its solar energy ecosystem, creating green jobs while decreasing emissions and providing generations to come with a secure future.

FAQ’s:-

1. What is India’s renewable energy capacity target for 2030?
India aims to achieve 500 GW of renewable energy capacity by 2030, including significant expansion in solar, wind, and other clean energy sources.

2. How is Hartek Group contributing to India’s solar revolution?
>>>>>>>>>>>>>>>>>Hartek Group has connected 10 GW of solar power to the grid and executed 350+ EHV and HV substations, driving India’s renewable energy expansion.

3. What role do public-private partnerships play in solar expansion?
Public-private partnerships (PPPs) attract large investments, foster innovation, and accelerate the deployment of solar projects across India.

4. How can technological advancements boost renewable energy capacity?
Innovations in solar storage, grid stability, and efficiency will enhance energy production and support India’s 2030 renewable energy goals.

5. What are the key challenges in achieving India’s 2030 renewable target?
Major challenges include land acquisition, grid integration, financing, and the need for skilled workforce development and policy consistency.

Economy of Scale Holds Key to Renewable Energy Re-Manufacturing

Leveraging the ‘Make in India’ Campaign for Renewable Energy Growth

The renewable energy industry can draw a lot from the government’s flagship ‘Make in India’ campaign to bolster its prospects.

The Rise of Renewable Energy and Its Impact

With sustainability being the order of the day, manufacturers across the globe are increasingly developing more and more efficient ways of tapping renewable energy. Aimed at reducing dependence on fossil fuels, this welcome trend is contributing to clean energy competitiveness. Making giant leaps in the renewable energy sector, India, too, is at the heart of this transition.

India’s Renewable Energy Growth Trajectory

In 2016-17, the output of renewable power projects went up by 26 percent, making the Indian renewable energy sector the fastest-growing in the world. According to the National Resource Defense Council, more than 1 million full-time equivalent jobs will be created by the solar industry alone by 2022. This includes more than 2 lakh engineering jobs and over half a million skilled sector jobs. The wind sector, on the other hand, will help generate 1.9 lakh jobs in the next five years.

‘Make in India’ and Its Role in Renewable Energy

The renewable energy industry can draw a lot from the government’s flagship ‘Make in India’ campaign to bolster its prospects. Hartek Group, equipped with high-quality manpower to support the domestic solar and wind manufacturing markets, is helping India emerge as a global manufacturing powerhouse catering to all the needs of the renewable energy sector.

Opportunities for Domestic Manufacturers

The ambitious target of scaling up clean power production to 175 GW by 2022 will create massive opportunities for domestic manufacturers. To capitalize on this growth, manufacturers must innovate and adapt to market demands.

Innovation and Competitiveness in Solar Manufacturing

The future of the solar manufacturing business will depend on how Indian companies beat the competition through constant innovation, quality improvement, and marketing. Despite competition from Chinese manufacturers, India holds a massive market potential for solar panels.

Government Support and Policy Initiatives

Government Support and Policy Initiatives

To realize this potential, domestic manufacturers should prioritize clean energy strategies. The government can support this by offering:

  • Incentives and subsidies

  • Effective energy and solar skill development policies

  • Establishment of more module assessment labs

  • Encouragement for R&D initiatives

  • Reduction of procedural delays in executing projects

Challenges in Domestic Solar Manufacturing

Despite the immense scope, challenges remain. Lack of scale and an underdeveloped supply chain hinder growth. Flexible incentives and financing options, effective net metering policies, and anti-dumping duties on foreign solar module manufacturers are critical needs.

Strengthening India’s Solar Industry Competitiveness

To make the Indian solar industry globally competitive, the government should focus on a larger policy framework that supports domestic manufacturing plans. This will help India:

  • Control the solar supply value chain

  • Increase revenue and profitability

  • Address issues related to transport, infrastructure, taxation, and power outages

Building a Skilled Workforce

The government should create a skilled workforce by introducing solar manufacturing courses under the National Skill Development Mission. Supporting large-scale projects and fully integrated manufacturing plants under the ‘Make in India’ policies will be essential.

Economies of Scale and Cost Reduction

To achieve economies of scale, India must reduce manufacturing costs. This will enable strategic innovation and promote exports, boosting the overall competitiveness of the industry.

Global Trends and Manufacturing Clusters

The government should take cues from global trends by establishing integrated solar industrial clusters. This will foster better industry linkages, enhance manufacturing efficiency, and support innovation.

Impact of Global Competition

Some of India’s largest solar equipment manufacturers are facing financial losses due to competition from Chinese firms, which prioritize low-cost power over local manufacturing. Interestingly, prior to the National Solar Mission, Indian solar firms were focusing on OEM manufacturing and exports, generating billions in export revenues. However, with the entry of Chinese competitors, module prices fell sharply, resulting in a substantial market share loss for Indian companies.

Government Measures to Boost Domestic Manufacturing

To correct this imbalance, the government offers 20-25 percent capital subsidies and other incentives under the ‘Make in India’ campaign. The Viability Gap Funding (VGF) mechanism and GST relaxation (waiving 12% countervailing duty and 5% VAT on domestic solar components) aim to boost domestic solar production.

Future Growth Potential

According to government capacity targets, India’s annual solar module market could exceed $10 billion in the coming years. However, to avoid straining the power infrastructure, the government and industry must implement corrective measures.

Fostering a Sustainable Future

A ‘reduce, encourage, deregulate’ policy for power generation can benefit Indian manufacturing by ensuring cheap and readily available power. The government plans to spend Rs 210 billion ($3.1 billion) on India’s solar panel manufacturing industry, aiming to increase photovoltaic capacity and create an export-oriented sector.

India’s Renewable Energy Investment

In 2016, India accounted for 5 percent of the world’s renewable energy capacity, investing $9.7 billion (Rs 64,990 crore), according to the Renewables Global Status Report 2017 by REN21. Direct and indirect renewable energy jobs (excluding large hydropower) reached 8.3 million globally in 2016.

Challenges with Cheap Imports

Despite the growth, domestic manufacturers face challenges from cheap imports, with Indian firms accounting for only 13 percent of supply. The Indian Solar Manufacturers’ Association has called for safeguard duties on solar cells and modules.

Funding Challenges

Another issue plaguing Indian manufacturers is the lack of access to funding for building manufacturing units. Private banks remain hesitant to offer loans at attractive rates.

Favorable Government Policies

The government’s efforts, including DCR quota for government-based energy projects and financing support, have benefited domestic solar manufacturers. However, further support is needed.

Positive Outlook for Domestic Manufacturing

The Indian government is committed to supporting domestic manufacturing. Plans to release a new solar manufacturing policy with VGF subsidies will help Indian companies compete globally.

Solving Macro Challenges

To promote domestic manufacturing, India must address macro challenges such as:

  • Ease of doing business

  • Infrastructure development

  • Affordable financing

  • Reliable local raw material supply chains

Solving Macro Challenges

Promoting Private Investment

The Ministry of New and Renewable Energy encourages private investment by offering fiscal and financial incentives and allowing 100% foreign direct investment (FDI) in renewable energy.

Boosting Solar Inverter Industry

The solar inverter industry in India, still in its early stages, will expand as domestic solar module manufacturing strengthens.

Increasing Domestic Capacity

To meet annual solar targets, India must increase domestic manufacturing capacity. For reliable solar solutions, contact Hartek Group – your trusted partner in renewable energy. The DCR policy under the ‘Make in India’ plan supports this initiative, but more state-level mandates are needed to ensure sustainable growth.

FAQ’s:-

1. How does the ‘Make in India’ initiative support renewable energy?
The initiative boosts domestic solar and wind manufacturing through incentives, subsidies, and policy support.
2. What are the key challenges in India’s renewable energy sector?
Challenges include competition from imports, funding constraints, and infrastructure gaps affecting domestic manufacturing.
3. What government policies promote renewable energy in India?
Policies include Viability Gap Funding, GST relaxation, skill development programs, and incentives for domestic manufacturers.
4. How does renewable energy contribute to job creation in India?
The sector is projected to generate over 1 million jobs in solar and 1.9 lakh jobs in wind energy by 2022.
5. What is India’s target for renewable energy capacity?
India aims to scale up renewable power production to 175 GW by 2022, creating growth opportunities for manufacturers.