By tomorrow, Friday, August 22nd, the Indian Ministry of Finance will notify its decision on anti-dumping duties (ADD) on solar cells and modules. If the duties are imposed as suggested by the Ministry of Finance, they will have a highly disruptive effect on the Indian solar market. Employment in this sector is likely to suffer a major setback, as significant number of jobs would be lost downstream (EPC, installation, project development, maintenance), as compared to the figures that would be protected upstream in the fairly automated manufacturing processes. Given that job creation is a measurement index for the growth of Indian economy, this is worth considering.
- By a rough estimate, solar sector creates around 10-11 jobs per MW of installed capacity
- A reduction in installed capacity through ADD by around 20% would reduce solar jobs by ca. 23,000
- Many more jobs are created in installation than in manufacturing
According to the International Renewable Energy Agency (IRENA) 13,60,000 jobs were created globally in the solar PV industry by April 2014. This is based on a cumulative installed capacity of 136 GW. In the US, according to the National Solar Jobs Census, a total of 1,42,000 jobs have been created for an installed capacity of 12 GW, in the past. Therefore, by a rough estimate, around 10-11 jobs are created per MW of installed solar PV capacity. If we look at the Indian market, for an installed capacity of 2.7 GW, this would indicate a contractual and part time employment figure of around 27,000 people. The number is probably conservative, since the construction and maintenance processes in India are typically more labor intensive than in developed economies.
Before ADD appeared on the radar screen, BRIDGE TO INDIA predicted that India’s grid connected solar market would reach 4.3 GW by mid-2015. With the prospect of ADD, however, we have revised this figure downwards to 3.2 GW. This means that even if there is no net loss of jobs per MW, due to the imposition of duties, opportunity for around 11,000 jobs would be scuttled. Now given that 27,000 jobs were supporting a capacity addition of around 1 GW per year for the past two years, a reduced growth of just about 500 MW over the next one year, as predicted by BRIDGE TO INDIA [read more in our India Solar Compass, July 2014 edition], would additionally result in the loss of existing jobs.
We estimate that a capacity of 1,050 MW, for which PPAs have already been signed, is likely to be scrapped or significantly delayed. Going forward, several states might want to revise their capacity addition targets downwards. Also, parity driven capacity additions, both rooftop and ground mounted, were expected to be major contributors for future growth. With the imposition of duties, this market will suffer a set-back for at least a couple of years.
According to BRIDGE TO INDIA’s estimates, the Indian solar market would have grown to a cumulative capacity of about 16.5 GW by 2018. This means that around 1,65,000 solar jobs would have been created in the country by 2018. On an average, around 30,000 jobs would have been created every year for the next four and a half years. But, if we assume that the 16.5 GW number by 2018 would be revised downwards by around 20% to 13.2 GW, due to the imposition of ADD, that would lead to a shortfall of around 23,000 jobs. In comparison, manufacturing facilities with 1 GW of module manufacturing capacity per year create only about 500 jobs.
Jasmeet Khurana is a Consultant at BRIDGE TO INDIA.