Solar: India reduced import of solar modules from China by 76 percent, increased manufacturing domestically

Pankaj Prasad
Import of solar panels
Import of solar panels

India started imposing customs duty of 40 percent on solar modules and 25 percent on solar cells from April 2022 to cut imports and promote local manufacturing.

Bucking the global trend, India has recorded a 76 percent decline in solar module imports from China during the first half of 2023, reflecting India's firm shift towards self-reliance in solar manufacturing. Year-on-year, India's solar module imports from China declined from 9.8 GW in the first half of 2022 to just 2.3 GW during the same period in 2023, the report by global energy think tank Amber said. This strategic shift, along with the imposition of tariffs, underlines India's determination to reduce dependence on imports and prioritize the development of its domestic manufacturing capacity.

“India’s dependence on China for solar module imports is satisfactory after 2022 and is actually reducing,” said Nashwin Rodrigues, India Electricity Policy Analyst at Amber. Domestic manufacturing is gaining momentum with the help of policy interventions. As India moves closer to self-sufficiency in solar manufacturing, dependence on Chinese modules and cells is no longer a hindrance. What is important now is to create an enabling policy environment to ensure that solar installations keep pace with the National Electricity Plan.

40% customs duty to be imposed on imported solar modules from April 2022

India had started imposing customs duty of 40 percent on solar modules and 25 percent on solar cells from April 2022 to cut imports and promote local manufacturing. The country's commitment to reducing import dependence and nurturing a strong domestic solar manufacturing ecosystem exemplifies the country's broader goals of sustainability and energy self-reliance.

As per its updated Nationally Determined Contribution (NDC) of the national plan to limit global warming to 1.5 degrees Celsius, India has committed to achieve 500 GW of installed power capacity from non-fossil fuel based resources by 2030. Solar is at the heart of this ambitious goal.

China's solar panels exports rise 3% in first half of 2023

The report also said China's exports of solar panels grew by an impressive 3 percent in the first half of 2023, taking the worldwide total to 114 GW. This represents a strong increase from the 85 GW exported during the same period last year.

"Solar growth is going through the roof," said Sam Hawkins, data lead at Amber. China's dominance of the solar panel manufacturing market, which accounts for nearly 80 percent of the global market share, has significant global implications. More than half of the solar modules exported from China during the period were destined for Europe, accounting for 52.5 percent of exports.

Its exports from China to Europe increased by 47 percent (21 GW) year-on-year, reaching a total of 65 GW during the first half of 2023 compared to 44 GW in the same period last year. After Europe, the largest expansion in Chinese exports took place in Africa and the Middle East.

Import of solar panels in South Africa increased by 438 percent

South Africa saw a significant increase of 438 percent (2.7 GW) in solar panel imports from China in the first half of 2023 compared to the same period last year. This surge contributed to Africa's overall growth of 187 percent (3.7 GW), making it the fastest growing region. After Africa, the Middle East imported a 64 percent increase (2.4 GW) compared to the former during the first half of 2023.

The report notes that despite growth in solar panel exports, the gap between solar module exports and installed PV capacity is widening globally. This accounts for the challenges related to storage of modules in warehouses and installation of solar generation and grid integration.

Sam Hawkins, data lead at Ember, stressed the need to accelerate installations and grid integration to keep pace with global module supply, saying, “We have enough solar panels; we just need to get busy installing them.” He called for policies that prioritize rapid scaling of installation and grid integration to match growing module supply.