India's solar energy sector is gaining momentum, US tariffs have adverse effect

Business News:India is continuously becoming stronger in the solar energy market. India is competing with China to increase its share. This is because India is able to meet the growing domestic electricity needs by selling to its own citizens. Government subsidies and tax exemptions are also supporting this sector. Therefore, Indian companies hope that even though the US tariffs will affect their exports, they can compensate for this loss from the domestic market.

After years of ramping up coal production, India has installed enough solar capacity in the last five years to power millions of homes. However, India still faces a major challenge. China makes more than 80% of the world's solar components, and Indian companies also have to import many essential raw materials from China. The US, the biggest foreign customer for Indian solar companies, is also posing a tough challenge. President Donald Trump imposed a 50% tariff on Indian goods last month.

Domestic seeking help

India's huge domestic demand for clean energy is helping solar companies overcome this pressure. Energy experts say that India's growing need for solar power will reduce the impact of US tariffs. In the recent financial year, about one-third of the solar panels made by India were sold to the US. Revenue from America has helped Indian companies improve supply chains and reduce dependence on Chinese parts. Experts say that even if sales in America slow down, India's domestic needs and big clean energy goals will give them buyers in the country.

Companies Expanding Capabilities Amid Challenges

Jaipur-based ReNew, a solar energy company, manufactures enough solar modules every year to produce 4 gigawatts of electricity. This is equivalent to the energy needs of about 2.5 million Indian homes. This factory, which started about 2 years ago, employs about 1,000 people and has become a symbol of the growing pace of India's solar energy industry. India's solar component manufacturing capacity more than doubled in the financial year that ended in March. Similarly, Hyderabad-based Vega Solar also says that the company has changed its customer base after the Covid-19 pandemic. Before the pandemic, 90% of the business was exported and only 10% was on domestic supply, but now it has completely reversed.

Policies And Demand Boost Solar

India is one of the world's highest carbon emitters but is promoting the use of clean energy. Experts say that the cost of solar power is now half that of new coal-fired power plants. Apart from this, the abundance of sunny days in India has increased the installed solar power capacity by 30 times in the last 10 years. India currently has about 170 gigawatts of renewable energy projects in the pipeline, most of which are solar and will be completed in the next few years. The country has set an ambitious target of 500 gigawatts of clean energy by 2030. Experts from IEEFA and JMK Research also believe that India's demand for solar modules may exceed domestic sales in the next two years, as a lot of modules are being exported. India has also been importing large quantities of solar modules from China.