Solar panel makers may help save $42 b: KPMG

A sustainable manufacturing policy for the solar panel industry could help save $42 billion in forex outgo by 2030, according to a KPMG report and the Indian Solar Manufacturers' Association (ISMA).

The ISMA also called for continued government support to the sector which could lead to better energy security and job creation.

Noting that about 100 gigawatts of solar capacity would be established in the country by 2030, the KPMG report said, “If a sustainable domestic solar manufacturing is promoted, it can save $42 billion in equipment imports by the turn of 2030.”

Currently, India imports more than $30 billion of electronic goods, including solar panels, annually making it the fourth largest item in the import basket, contributing to 23 per cent of its trade deficit.

The report  noted that if local manufacturers are given tax and other incentives, the government would still be able to make a net benefit of $1.1 billion over the next ten years due to employment and resultant tax gains. The report said that local manufacturing could also help create 50,000 direct jobs and over 1,25,000 indirect jobs over the next five years.

Noting that the national manufacturing policy recognises solar manufacturing to be of strategic importance, the KPMG report said that the solar manufacturing industry has been facing challenging times because of various factors including lack of a level-playing field and various global factors.

“The domestic solar manufacturing is competitive but suffers due to lack of incentives that are provided to solar manufacturers in other nations. As much as 40 per cent of domestic solar producers have shut down, with the industry utilisation at just 21 per cent,” ISMA president Ashwani Sehgal said.