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Chinese threat over solar power equipment sector

According to reports, after virtually swamping India’s thermal power equipment market, China is now posing a grave threat to the fledgling local solar power equipment industry. According to industry sources, Chinese solar equipment suppliers like Suntech, Trina Solar, Yinglee Green Energy, Jinko and LDK have set their sights on the burgeoning Indian market. The aggressive entry of these Chinese players whose products are 25-30% cheaper is sending shock waves through the local industry which consists of relatively small players ill-equipped to face such competition.

According to sources, apart from the pricing power, the Chinese vendors offer suppliers’ credit, posing tough competition. There is no tariff protection for solar equipment makers, as import duty is nil. Chinese suppliers have been aggressively pushing their products in overseas, holding 65% of the global solar power equipment market.

The government provides subsidies for solar power. Developers, however, prefer cheaper Chinese equipment as it helps them quote competitive tariffs and win projects under competitive bidding.

Indian suppliers are now bonding together to face the emerging threat. “We will form an association to make our voice heard,” Dhruv Sharma, chief operating officer, Jupiter Solar Power Ltd, a solar power equipment major, said. “At least 20 solar power equipment manufacturers including Moser Baer, Indosolar, Euro Multivision, Websol, Vikram Solar, Modern Solar, HHV and Solar Semiconductor have agreed to join,” Sharma said.

Indian manufacturers are unhappy with the prevailing duty structure and want a level playing field. “While import duty on equipment is nil, we have to pay excise duty on components, which are unrecoverable as the final product is duty-free,” Prasanth Sakhamuri, chairman, HHV Solar, said.

“That puts the local industry at a disadvantage vis-a-vis imports,” Sakhamuri said.

Even overseas players who have set up manufacturing facilities in India are seeking protection. “If India does not want to see the solar industry dominated by the Chinese, it must work at creating a level playing field,” Larry Holmberg, CEO and president of Solar Semiconductor, a Canada-based firm which has set up operations in India, said. “I believe India has the opportunity to rapidly become a key play in the global equipment industry in five years. But the government must move quickly to provide support and incentives to the local industry,” he said.

“The government needs to nurture this industry which is in its infancy. Indian money (subsidy) should be used to generate local employment,” Sharma said. Some 15,000-16,000 people are employed by the local industry.

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