Bridge India

It’s China vs China for solar modules market share in India

Chinese module suppliers increased their share of the Indian solar PV market, which added a total capacity of 3.6 GW in the past 12 months (refer), to 75%, up from around 50% in the previous 12 months. In contrast, the share of Chinese suppliers in the US market is believed to be less than 30%. Other international and domestic suppliers increased their overall sales volume in India but saw their market share halve from 24% to 12% and from 26% to 13% respectively.

  • Existing Chinese majors have maintained their market share but the new Chinese companies have taken a significant share away from Indian and other international suppliers
  • Module supply glut in China may lead to even more Chinese suppliers focussing on the Indian market with aggressive pricing
  • It is a buyer’s market for Indian project developers despite major increase in demand

8 out of top 10 module suppliers in the Indian market are now from China as against just 4 out of top 10 in the previous year. The remaining 2 names include First Solar (USA) and Waaree (India). While early movers Trina Solar and Canadian Solar have managed to maintain their market share and retain top positions, the big change is significant pick up in market share by other Chinese suppliers including JA Solar, GCL Poly, Hanwha, BYD, Talesun and Risen. These companies had a very marginal presence in the market previously but now have a combined market share of 32%.

Shipments for major non-Chinese suppliers such as First Solar, Tata Power Solar and Vikram Solar grew in volumes but respective market shares have come down drastically.

Going forward, we expect the Chinese module companies to dominate the market notwithstanding the Indian government’s push for Make in India and the imminent announcement of a new manufacturing policy for the sector (refer). A mix of factors including local supply glut and falling prices (refer) means that the Chinese companies will compete hard for a growing share in the Indian market. The possibility of other mid-sized Chinese suppliers entering the market with aggressive pricing also cannot be ruled out.

Indian suppliers are expected to maintain a market share of 10-12%, broadly proportional to capacity set aside for Domestic Content Requirement (DCR). However, we expect a churn in the domestic supplier market shares once Adani’s 1.2 GW manufacturing facility becomes operational.

The big beneficiary of falling prices and increasing competition between module suppliers is obviously the Indian solar market. Project developers are in a sweet spot as they are in a buyer’s market despite increasing Indian demand. They will be relieved with falling prices, which will serve to grow the appetite of local investors.

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