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INTERVIEW: India's Adani Solar to raise output to 3.5 GW, drive up domestic content

Highlights

New 2 GW module line due in December

Bid for government incentive scheme

Modules, cell prices seen firm for 6-12 months

India's Adani Solar will more than double its solar photovoltaic module manufacturing capacity in December as it strives to boost Indian content in its products and reduce polysilicon and wafer imports from China, the company's CEO Ramesh Nair said Nov. 26.

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A unit of the Indian conglomerate Adani group with businesses spanning coal, power, agriculture and infrastructure, Adani Solar has a plant in Gujarat state and undertakes both rooftop and EPC solar project installations.

It has existing capacity to produce 1.5 GW/yr of solar PV modules and is set to commission a new 2 GW production line December. In all, the facility will be able to produce around 7.6 million units a year.

"There is going to be an additional push on energy transition in the country, and we already have sufficient traction which will increase," Nair said, referencing the UN Climate Change Conference in Glasgow, where India increased its renewable energy target from 450 GW to 500 GW by 2030.

India has 45.61 GW of installed solar capacity out of total installed generation capacity of 388.13 GW.

The accelerated rate of growth presents a major challenge for the likes of Adani, Reliance and JSW.

In September Adani chairman Gautam Adani said the group would invest over $20 billion across renewable energy generation, component manufacturing, transmission and distribution over the next 10 years.

Imports from China

The majority of India's solar components come from China, but Adani aims to develop domestic supply chains.

"The polysilicon will be made here, that is the focus area," Nair said, noting a three-year timeline to establish the necessary plant.

"In two-and-a-half to three years you will have the complete value chain of solar manufacturing in the country," Nair said.

India's 4.5 GW-5 GW solar cell manufacturing capacity could grow to 15 GW-30 GW in that time, while module capacity of 10 GW could rise to 25 GW-30 GW, Nair said.

Aiding this growth is the Indian government's Rupees 45 billion ($601 million) Production Linked Incentive scheme for solar module makers. Adani Solar has bid to be a beneficiary of the scheme.

Price outlook

Solar component prices will continue to stay firm in the next 6-12 months, but new polysilicon capacities in China thereafter could deflate the market somewhat, Nair said. A cooling of freight prices is also expected.

A 540 W solar module currently costs $0.32/Wp, up 25% year on year, according to Nair. Solar wafer is currently at $0.13/Wp, up about 75% year on year.

Part of the cost increase had been passed on to Indian customers, "but of course there is erosion of bottom line too," Nair said, noting the scope for renewed cost reductions over a five-year view as technologies evolved.

Looming factors that will influence Indian solar costs include a 40% basic customs duty on imports of modules and a 25% duty on solar cells, designed to drive domestic supply chains.

The PLI scheme would eventually lead to "a lot of self-sufficiency in our own country," Nair said, but until then "we have to look at imports of polysilicon and wafers and obviously you are at the mercy of pricing from China."

Nair is a member of the Confederation of Indian Industries' National Council for Renewable Energy.