The export of solar modules from India is experiencing a surge, benefiting from the China-Plus-One strategy, which has created opportunities for major Indian players.
Originating in 2013, the China-Plus-One strategy is a global business approach where companies diversify their operations beyond China to alternative destinations.
In the first half of FY24, the value of exported solar cells and modules from India amounted to Rs 8,307 crore, marking a substantial increase from Rs 1,453 crore in the corresponding period the previous year, as reported by rating agency Icra. This growth trend is reflected in the performance of several prominent domestic manufacturers.
Adani Enterprises, for instance, reported a 205 per cent increase in overall module sales in the quarter ending September 2023 (Q2FY24).
Of the 630 megawatts (MW) sold, 405 MW were exported, compared to 75 MW in the same quarter the previous year.
Vikram Reddy, Vice President and Sector Head-Corporate Ratings at Icra, noted that India's solar module exports are primarily directed towards the US market, where the restriction on Chinese imports has created opportunities for significant Indian players.
However, there is a need to monitor the sustainability of this trend, given the increasing capacities in the US market.
Jugeshinder Singh, CFO of Adani Enterprises, highlighted that a major portion of the company's module exports was to the US market.
Waaree Energies, a major player in the segment, reported an order book of Rs 28,000 crore as of February, with 80-85 per cent of orders (confirmed and in the pipeline) coming from export markets, including the US, Canada, and Europe, among others, according to rating agency Crisil.
Tata Power, anticipating the commencement of production from its 4.3 gigawatt cell and module plant in Tamil Nadu by the end of FY24, also has plans to cater to international markets.
Praveer Sinha, CEO and MD of Tata Power, informed analysts that the new company, TP Solar, in Tamil Nadu may sell 1 to 2 GW depending on the demand in international and domestic markets.
JSW Energy is also set to enter the solar module manufacturing sector with a capacity of 1 GW and a timeline of 2025.
While an email query regarding international market sales remained unanswered, executives from rating agencies anticipate that exports will continue to be a strategic focus for most large manufacturers.
Rajashree Murkute, Senior Director and Head of Infrastructure Ratings at CareEdge, emphasized that solar module exports are expected to remain on the rise for the next twelve months.
While imports remain more viable for domestic buyers in the short term, exports offer a premium of up to 30 per cent for domestic manufacturers. In the long term, a mix of exports and domestic sales is foreseen, though the target countries may evolve.
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