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SOLARPOWER

Securing the Supply Chain


for Solar in India; a FICCI Report
Summarized by Energetica India

The summary analyses key elements of Indias Solar Supply Chain

S
ecure, timely and cost effective The key elements in the solar energy user/developer does not land up with non-
supply of raw materials is the back- supply chain framework consists of raw performing or low-performing assets, it is
bone of any industry, it not only material/component suppliers to solar crucial that plan for standards to enable
increases the efficiency of the production photovoltaic module and solar thermal control on quality is established.
process but rationalizes raw material in- system manufacturing, balance of system
ventory and finally overall product cost. which includes inverters, connecting wires, Cell Manufacturing
The current solar energy manufac- trackers etc. and the integration of the dif- Similar to module manufacturing, PV cell
turing base in India comprises primarily ferent components. manufacturing is also dependent on nearly
PV cell and module manufacturing with 100% imports of all the raw materials and
1100 MW of cells and 1800 MW of solar Supply of Raw Material / gases. There is also the need to substitute
modules with very limited and disparate ComponentsSolar PV costly raw materials with alternate raw
fabrication and assembly capacities for Module BOM materials.
solar thermal products and accessories. By Presently, in module manufacturing, 90% Dependence on imports has resulted
and large, Indian solar industry has been value of materials is imported. in a significantly high cost at cell level for
dependent on imports of critical raw ma- The goal of the National Solar Mission Indian manufacturers as compared to the
terials such as EVA, back-sheet, reflective for local component will be truly achieved competition from Chinese and other Asian
glass, balance of system (BOS) for Solar only when the materials like EVA, Back- countries.
Thermal and PV as also core machinery. sheet, Junction Box, Low Iron tempered As is evident from the above men-
With regard to PV industry, till recently, by Glass, Aluminum Frame are available in- tioned statistics, capacity addition in India
and large it has exported major part of its digenously with competitive quality and has been stagnant over past few years,
finished products to developed western cost advantage. Import of these materials with China and Taiwan accounting for
markets. is an impediment for the growth of the 59% of the cell manufacturing capacity in
There is clearly tremendous scope for module manufacturing industry in India 2010.
development of domestic production base as this makes local module costing highly
for some of the key inputs to secure and unattractive compared to that from other Wafer Manufacturing
strengthen the supply chain to reduce the Chinese and other Asian countries. The challenge here is the processing of
foreign exchange outflow and create di- To ensure material offered from Asian waste slurries. The government can look at
rect and indirect long term employment in countries meets pre-defined standards encouraging technology transfer to install
the solar industry. and specifications which will ensure that common facilities.

Estimated module manufacturing cost. Estimated cell manufacturing cost.

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SOLARPOWER

pacity should be leveraged to ensure quick


Solar Equipment Fabrication / capacity buildup. Special zones for solar Inverters
Assembly would help India to service global require- The Inverter manufacturers in India have
Tracking System ments. huge manufacturing capacities. One esti-
Presently the tracking systems being devel- mate is that there is an average of 4 million
oped are done using universally available Equipment & Machinery inverters sold per year. With an average
components. The challenge here remains the absence capacity of 800 W, this amounts to 3200
To ensure efficient solar based systems of manufacturers for high capital intensive MW of non-solar inverters being manufac-
are developed at competitive costs, devel- equipment and machinery in India. tured every year in India.
opment of efficient tracking systems is the While solar manufacturing is highly Though traditional inverters cannot be
need of the hour. There should be a focus capital intensive, major portion of the in- directly compared with more sophisticated
on developing dedicated tracking systems vestment is towards equipment and ma- solar PV inverters, with right technology
and related components for solar applica- chinery. There has been a huge capacity backing, the Indian manufacturers will be
tions which will help in driving the costs built in European countries in the past for able to easily augment their capacity to
down. solar. The idle capacity of this installed base meet the PV inverter requirement under
could be assessed to analyze if there could the JNNSM.
Solar Manufacturing Hubs be a possibility of using capital equipment There is also a need to customize the
There is a need for creating solar manufac- presently unused in these countries. PV inverter for Indian conditions.
turing hubs in India.
Promotion of solar manufacturing Balance of SystemSolar Thermal Batteries
hubs for solar thermal and PV is an ef- and Solar Photovoltaic System The challenge here has been the sustain-
fective mechanism to ensure high grade Solar Turbines able and consistent availability of quality
ecosystem with all necessary infrastruc- Presently there are only few international inverters and deep discharge needs to be
ture and utilities essential for such solar vendors for solar turbines. ensured. There is high dependence on im-
manufacturing being made available. Such If the CSP proliferation plans of the ports.
investments could be encouraged with at- government have to be made effective, Rationalization of existing duty struc-
tractive fiscal benefits to investors. There is there have to be other alternatives includ- ture for near term on both these compo-
sufficient number of case studies in other ing possibility of supporting indigenous nents when used for solar applications
industries such as auto-ancillary, pharma- developments and manufacturing over could be considered.
ceuticals and leather which can be suitably a period of time without compromising Feasibility of local manufacturing and
adopted. Locally existing fabrication ca- quality and performance standards. sourcing for these items should be evalu-

energetica india SEP|OCT13 3


SOLARPOWER

ated and necessary incentive package to Absorber Coating


promote expansion of capacity by existing Presently appropriate facilities for develop-
players and setting up of new projects by ing absorber coating are not available in
international as well local players should the country.
be ensured. The same has to be promoted and
developed to meet the growing demand
Capability Development expected in the coming years, while doing
Small and Medium Enterprises will require so specific focus should be given on han-
capacity and capability enhancements in dling increased lengths of absorber tubes.
the areas like fabrication, section bending, Absence of critical mass in the initial pe-
glass bending, surface coating, selective riod requires government facilitation or
coating and mirror bending tending to- encouragement to an existing PSU to take
ward higher degree of automation. up this manufacturing.
There is a reasonable cost arbitrage
benefit estimated for manufacturing in In- Vacuum tube availability
dia which can be leveraged effectively. The Availability of vacuum tubes which is a key
country has a potential base for meeting ever, immediate steps need to be taken by component of solar thermal installations is
global requirements in addition to meet- the government to encourage a couple of a major issue presently.
ing domestic demand, however, to ensure already established mirror manufacturers There are a limited number of inter-
the same, appropriate incentives should be in the country (Indian & MNCs) to set up national suppliers for these products pres-
provided to these enterprises to encourage solar mirror line to service the growing lo- ently. R&D funding from government for
them towards building capabilities pertain- cal demand in the country. development of a comparable product is
ing to solar. Such investments will need to be crucial and this will necessarily entail en-
backed by a strong incentive package gagement with international experts and
System Integration since project viability is not expected to institutions with domain expertise in rel-
Network of System Integrators be achieved in the two to three years time evant areas.
As industry matures, different parts of the frame expected out of such capex invest- Cost reduction and availability would
value chain and the system integration will ments by most companies. be the key targets for such development.
also evolve. There should be a focus on de- Indigenous manufacturing option will be
veloping a network of system integrators Reflector Coating necessary post the above.
to meet the local demand. The challenge has been the availability of
India must ensure that appropriate effective reflector coating. Glass to Mirror
quality checks are in place to qualify such There is a need to develop appropri- The challenge is the lack of domestic mir-
integrators. There can be regular audits of ate reflector coating by which there would roring and mirror cutting facilities for solar
such entities from time to time to ensure be a possibility of using the substrate itself grade mirrors.
that they maintain the required quality as a reflector. This needs to be done in- Mirroring and mirror cutting facilities
standards. To strengthen system integra- digenously to ensure capability building as should be developed within the country to
tion, schemes similar to Channel Partner well as ensure lower costs. Research insti- reduce dependence on external suppliers.
scheme should also be initiated for system tutions and industry collaboration initiative This needs to be addressed on a priority
integrators. for such developments is an imperative basis as availability of solar grade mirrors
and this needs to be aggressively encour- could become a major hindrance in prolif-
Supply of Raw Material / aged. eration of solar installations in the country.
Components Solar Thermal
Reflector Receiver Tubes Heat Transfer Fluid / Heat Storage
Presently most of the thermal systems use Mirror finish receiver tubes used in line System
primarily mirror and coated aluminium focusing concentrators are required to be Lack of domestic heat transfer fluid suppli-
based reflector in certain cases. While imported presently in the absence of suit- ers is a worry in this space.
availability is not a major issue as of now, able alternatives available in the country. The heat transfer fluid forms a major
costs are very high since requirement is India should look at having indige- cost in the capex and is an important com-
presently being met through imports. Fur- nous manufacturing based on technology ponent for the performance of the plant.
ther, Indian projects do not have econo- collaboration. The present market is controlled by few
mies of scale which are seen in other ma- Second approach could be to have fo- players. It would be of importance to de-
ture solar markets. cused research between Indian academia velop domestic manufacturers who have
Waiver of duties and taxes on such im- and interested companies leading to crea- petrochemical facilities in India to produce
ports is one of the near term requirements tion of commercially viable products and such fluids at affordable prices through
to rationalize input costs for users, how- their manufacturing value chain. R&D and technology transfer routes.

4 SEP|OCT13 energetica india

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