Chinese solar firm LONGi to invest $309 million in Andhra Pradesh 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, the company said in a statement.
LONGi will set up the facility in Andhra Pradesh with an investment of around Chinese renminbi (RMB) 1.94 billion ($309 million) for manufacturing 1GW of monocrystalline silicon cells and modules each. Such modules account for nearly 60% of a solar power project’s cost.
Monocrystalline silicon is more efficient and expensive than multicrystalline silicon and is widely used globally to set up solar power projects. It also improves the average efficiency of a solar panel, resulting in better capacity utilization factor of a solar project.
The world’s largest monocrystalline solar wafer maker’s plans come against the backdrop of the Indian government conducting an anti-dumping investigation on solar equipment imports from China, Taiwan and Malaysia. Additionally, India is considering levying 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 decision by the government 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 RMB 2.42 billion and annual net profit of RMB 120 million. The projects 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 about the Shanghai Stock Exchange listed company’s India plans on 14 December.
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 will 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 will commence production in January 2020,” the statement added.
US President Donald Trump’s January decision to levy tariff on imported solar panels will also hurt Chinese module makers.
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 manufacturing facilities in India.
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.