EnergyTrend: Solar Project India to Increase Export Outlets of the Solar Energy Industry

India government has recently announced the official version of its solar energy industry development plan—the National Solar Mission. EnergyTrend, a research division of Trendforce Corp. remarks that the India policy delivery will exert a short-term bullish influence on the global solar industry.

In the short term, stimulated by the policy, solar energy demand will grow fast. Moreover, since India’s solar energy industry cluster hasn’t taken shape yet, India market will become a key import market, which will increase new export outlets for export-oriented manufacturers from Taiwan, China and Japan.

The India government hopes to promote domestic solar power generation capacity and solar industry strength through the implementation of the scheme so as to further rank India into one of the leading countries in global solar energy industry. The plan, composed of two parts, PV and Solar Thermal, will be carried out into three phases, with the India’s aggregate PV market expected to reach 20GW and the Solar Thermal market to 14GW by 2022.

According to EnergyTrend’s statistics, India’s solar energy installations was only 5MW last year, but after the launch of the new plan, India market will expand into 1GW with policy subsidies and supports between 2011 and 2013 and is expected to reach 20GW in 2022, making India the most remarkable emerging market in the eyes of global manufacturers.

EnergyTrend thinks that the scheme’s influence on global solar energy industry can be observed from both market and industry perspectives. In view of the market, 2010 installations in Europe market exceed the expectation. Besides, major countries will cut subsidies in 2011, leading the market to turn conservative toward the outlook for 1H 2011. However, the timely subsidy policy launch from India has given the market a boost; while China, Japan, and USA have also introduced relevant new policies, which will lessen the impact of Europe’s subsidy reduction policies. In light of the high degree linkage between the solar energy market and policy, EnergyTrend believes that subsidy policies mentioned above are beneficial for the growth of global solar energy market in the first half of next year and raises the outlook of the global solar energy demand for the period to cautious optimism.

According to EnergyTrend, in the long term, India will become the main rival against Taiwan, mainland China, and Japan,because its government plans to attract the fund and technology of global solar energy industry in order to strengthen its solar energy industry. Furthermore, India’s solar energy industry will develop rapidly due to the domestic demand take-off. Compared with China and Japan, the solar energy industry in Taiwan doesn’t have any domestic demand backup. Therefore, once India manufacturers rise rapidly, Taiwan manufacturers will face more challenges than their peers in China and Japan.

Besides, according to the new energy reward policy lately issued by Japanese government, the reward subsidy applications from new energy companies will be accepted from Feb. 12^th to Mar. 15^th, 2011. Japan government says that any green energy company that introduces solar power, wind power, solar thermal utilization, biomass power, biomass thermal utilization, biomass fuel production, snow and ice thermal utilization, temperature difference energy utilization, hydropower, geothermal power, natural gas based cogeneration, fuel cells, microgrids will be subsidized up to 1/3 its operating expenses, 1 billion Japanese Yen at maximum.

In addition, there are other regulations about the subsidy amount in fields of the solar power, wind power, natural gas based cogeneration and microgrids.

Moreover, in terms of new energy introduction policies on local government level, Japan also encourages local public groups, non-profit NGOs and other organizations to participate, providing half of the operating expenses subsidy for the mentioned categories.

Thus, correspondingreward subsidy schemes have been developed by localgovernments in Hokkaido, Northeastern Japan, Kanto Area, Kansai Area, Kyushu and Okinawa, expected to bear fruits in 2011 and significantly promote the development of Japan’s various new energy and green energy businesses. The overall follow-up effect is worth concern.

Figure   India’s National Solar Mission Framework and Timeline

Source：MNRE，compiled by EnergyTrend ；July 18, 2010