China’s LONGi to invest $309 million in Andhra Pradesh solar manufacturing facility
New Delhi: LONGi Green Energy Technology Co. Ltd will be the first Chinese company to set up a solar equipment manufacturing facility in India, according to a company statement.
LONGi’s facility will be set up in Andhra Pradesh at an investment of around Chinese renminbi 1.94 billion ($309 million) for manufacturing 1GW of monocrystalline silicon cell and modules each. Solar modules account for nearly 60% of a solar power project’s cost.
Monocrystalline silicon is more efficient and expensive as compared to multicrystalline silicon, widely used globally in setting up solar power projects. It also improves the average efficiency of a solar panel, resulting in better capacity utilization factor (CUF) of a solar project.
The world’s largest monocrystalline solar wafer maker’s India plans come in the backdrop of the National Democratic Alliance (NDA) government conducting an anti-dumping investigation on solar equipment from China, Taiwan and Malaysia. Additionally, India is exploring to levy a 70% provisional safeguard duty on imported solar panels and modules from China and Malaysia, as recommended by the directorate general of safeguards. A final government decision is awaited.
Also, India plans to make it mandatory for firms to have local manufacturing capability to bid for the world’s largest solar tender of 20 gigawatts (GW).
“This investment is to generate annual revenues of RMB2.42bn and annual net profit of RMB120mn. The pojects will help LONGi to tap into overseas market further and improve its overseas sales as well as global mono market share,” the emailed statement said.
Mint reported on 14 December about Shanghai Stock Exchange listed firm’s India plans.
India is running the world’s largest clean energy programme with an ambitious target of putting in place 175GW of clean energy capacity by 2022. Of this, 100GW is to come from solar projects.
“The module factory will be completed and come into production in the end of August 2019 while the cell factory will be completed in the end of 2019 and commence production in January 2020,” the statement added.
LONGi’s India plans also come in the backdrop of US President Donald Trump’s January decision to levy tariff on imported solar panels that will impact Chinese module manufacturers.
For China’s solar panel manufacturing industry, with an estimated capacity of around 70GW per year, the US and India are major markets. The Indian solar module market is dominated by Chinese firms, with domestic manufacturers accounting for only 10.6% market share, according to consulting firm Bridge to India.
There has been growing interest from companies to set up domestic manufacturing facilities here.
The other Chinese firms that have been looking at solar equipment manufacturing in India include GCL-Poly Energy Holdings Ltd and Trina Solar Ltd. Also, yoga guru Baba Ramdev’s Patanjali Ayurved Ltd, the consumer goods products upstart, plans to diversify into solar power equipment manufacturing, Mint reported on 4 December.