For the past one month, I have been doing some research on the opportunity in India for solar ingots and wafer manufacturing. Based on the preliminary data I have, it is difficult to infer whether it is indeed a good opportunity for an entrepreneur.
As you might know, there is no company in India that makes ingots and wafers (these two, almost always, are made at the same place). The cell manufacturers are currently importing wafers from other countries. So, while MNRE is trying to create a powerful solar ecosystem a natural question arises about the need for ingot and wafer manufacturing within the country.
There have been news items that Lanco Solar ( see here and here) and Bhaskar Silicon (see here) are keen on putting up polysilicon, ingot and wafer plants, but I am yet to get absolute confirmation on the status of such plants.
Why is it that no company has a full scale facility for making ingots and wafers in India? The reasons are not far to see:
1.High scale of capital investments – Ingots and wafer manufacturing is a high capital intensive investment – a minimum of $50-75 million. OK, not much of a cost for many large Indian companies, but it not small either. For comparison, to put up a module making facility, it will require a minimum of about $1-2 million, while for a cell making facility, it will be about $20 million.
2. Stiff global competition – Some of the top ingot and wafer manufacturers in the world include Shin-Etsu, Sanyo and Sumko from Japan, MEMC from USA, LDK and Renesola from China, and Topsil from Denmark. Many of these companies have years of experience and considerable scale as of today. Competing with them on a world level would never have been easy for Indian companies
3. Lack of a domestic market – Until the National Solar Mission was released some months back, there was no domestic market for solar PV to write home about. Which meant those making ingots and wafers had to only rely on exports for their production. A large domestic market always provides a risk cushion which simply was not available in India until now.
That was until now. I am hoping that the projected furious growth of the solar PV power production in India, and the government’s inclination to encourage an entire PV ecosystem instead of just solar PV power plants, should result in India becoming self-reliant on a whole range of raw materials and support required for solar PV.