Nikkei Electronics Asia -- May 2008
India Focus
India's Solar Energy Industry Gains Momentum

With the government's recent announcement of a new set of initiatives for bolstering solar energy generation, the future for companies involved in the design and manufacture of solar cells and panels in India has brightened up significantly.

Solar energy units that generate up to a maximum capacity of 50 megawatts are to be supported by financial incentives of around 30 US cents for each kilowatt of solar power generated per hour. Incentives for feeding thermal power through to the power grids will be only slightly lower, according to a government statement. 

Also, under the special incentive package scheme, the Indian government is prepared to provide 20% of capital expenditure during the first 10 years for solar-related technology projects located in special economic zones (SEZ). For units located outside the SEZs, 25% of capital expenditure will be provided.

Rush to Invest

The announcement of these incentives for manufacturing solar cells and panels has spurred a number of companies into investing in photovoltaic power plants. The most substantial investment so far proposed has come from Reliance Industries, India's top-ranking corporate house. Senior government officials said that Reliance has submitted proposals for two facilities - one for a US$4.6 billion wafer fabrication, testing and packaging facility, and the other for a US$2.9 billion facility to manufacture polysilicon, ingots, wafers and photovoltaic modules. 

Earlier this year, Jairam Ramesh, Union Minister of State for Commerce, announced that four companies had submitted proposals for solar manufacturing units. These were: India-based Titan Energy Systems Ltd, which proposed a US$50 million investment in producing solar photovoltaic cells; Nano Tech Silicon India, which wants to invest US$2.1 billion to manufacture a thin-film solar cell fab; India-based XL Telecom & Energy Ltd, which is looking to invest US$76.25 million to make solar cells and solar modules; and KSK Energy Ventures, a Hyderabad-based VC fund, which will set up a unit for solar photovoltaic panels with an investment of US$70.25 million.

Ramesh added that the government has also provisionally approved a further five projects, for a total investment of about US$7 billion. These projects have been proposed by Chandradeep Solar (for an R&D unit); Neotech Solutions; Photon Energy Systems; Surana Ventures; and RamTerra Solar Pvt Ltd (for a photovoltaic module unit).

Meanwhile, another Indian optical storage manufacturer, MoserBaer PV Technologies, had earlier announced that it would be investing US$1.5 billion to manufacture silicon cells and photovoltaic modules.

Hyderabad-based Solar Semiconductor is another major company in the solar energy domain. It plans to invest US$1.1 billion over a 10-year time frame to manufacture solar cells and panels in the first phase. During the second phase it will focus on solar thin-film technology, and in the third it will scale up manufacturing capacity.

Older Companies Expand

Among the older manufacturers that are operating in India, Tata BP Solar, a joint venture between the Tata Group of India and BP Solar of the UK, is also expanding its equipment manufacturing facility located on the outskirts of Bangalore with a US$100 million investment, while SunTechnics Energy, a subsidiary of SunTechnics Gmbh of Germany, has also drawn up expansion plans for its manufacturing plant in Bangalore.

The solar energy industry in India has undoubtedly gained momentum, and should be able to keep pace with the government's aim of achieving 10% of the country's total electricity requirements through solar power by 2012.

by Sufia Tippu, Bangalore

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