India has significant solar power generation potential thanks to the high levels of solar radiation in most of the country. The hurdles are mainly in the market and political environment. These issues are common throughout the supply chain and the solar inverter market is no exception.
Solar inverters are considered to be the “heart of photovoltaic systems” because they are an essential part of solar energy generation. The extension of the deadline for the certification of BIS standards is intended to help manufacturers, but has also had negative effects due to the ambiguity of the guidelines.
Mercom had the opportunity to discuss these questions in depth with Leaf Luo, Brand Manager at Sineng, a China-based solar inverter manufacturer. Here are the excerpts from the interview.
What do you expect for the Indian solar inverter market in 2020?
Due to political uncertainties and the impact of import tariffs on solar cells and modules, the industry has had two consecutive “flat” years – 2018 and 2019. However, Sineng expects a broad pipeline of projects to drive the return to growth as a market fundamentals have changed and the price of the module has stabilized. As reported, more than 10 gigawatts (GW) of new generation capacity will be made available this year, and historic tenders at GW level will take place in the first half of 2020. This is because solar photovoltaics (SPV) are now mainstream. The demand for energy in India is increasing rapidly with increasing population, urbanization and modernization. Consumption is expected to reach 1,528 TW in 2040. As India is one of the 194 countries of the Paris Agreement under the United Nations Framework Convention on Climate Change, 40% of electricity is expected to come from renewable energy sources by 2030. With future electricity needs and clean energy in mind, the Indian government is trying to achieve its goal of on-grid solar power capacity of 100 GW by 2022 and 450 GW in the future.
How do you see future competition in the Indian market?
The ten largest inverter suppliers accounted for around 75% of deliveries worldwide in 2019 and 94% in India. In 2020, the top players are likely to get bigger, and there will be intense price competition and migration in the supplier landscape. Based on the inverter market share over the past five years, the supply-scale solar project market in India is dominated by central inverters. “The bigger the better” seems to be the mantra as most projects in India are mounted flat on the floor.
What about the certification of BIS standards?
MNRE has submitted draft guidelines for the BIS certification of solar inverters with an output of up to 150 kW. However, inverter manufacturers are struggling to get clarity about the ambiguous BIS certification process. The approval process for individual models was found to be expensive and the worst-case scenario for delays. Therefore, due to the capacity, the problems with the test fees and the availability of the test laboratory, the certification period has also been extended to June 30, 2020.
What trends do you see in central inverters and string inverters for floor-mounted projects?
Module manufacturers are not the only ones feeling strong pressure in the Indian solar market. Inverter companies are also facing an imminent market shakeout due to strong downward price trends and upfront costs. As of 2019, more than 35 inverter suppliers will be active on the Indian market. High quality Chinese inverters are available much cheaper than European inverters. So Indian developers are switching from German inverters to Chinese inverters. There is also a significant price difference between central and string inverters. Large solar project developers have used central inverters to account for the cost, which is comparatively lower when compared to the string inverters, and has gained a huge market share over the past five years.
What are some of the challenges in the Indian solar inverter market?
Although the Indian government has introduced various incentives and specific guidelines to make solar more attractive to investors, and there are various motivating factors such as the abundant sun exposure of around 300 sunny days per year and the availability of land, the solar power sector is still growing sluggishly. The addition and development of solar energy capacity in the solar industry suffers from many constraints, overlaps and gaps that exist in the current political and regulatory environment. There are five types of barriers: political and regulatory barriers: technology, transparency, accountability and infrastructure. These influence the transition to solar development in India.
In order to successfully achieve the goal of 100 GW by 2022, the government must support the solar industry in the form of a joint policy at the federal level. Proper implementation of the guidelines at the root level is also required. The government must also take action on a single window sharing system, easy and long term funding, and adequate infrastructure.
What are your product differentiators?
Sineng Electric is a leading global high-tech company specializing in renewable energies and has been pioneering the inverter market since 2019 with an enormous number of inverters installed worldwide. As a “one-stop solution provider” for solar inverters and energy storage, we have a broad product portfolio to meet the diverse needs of customers for applications in the residential, C&I and supply sectors. To ensure state-of-the-art technology and reliable products, the company has its own test center and dynamic research and development team acquired by a Fortune 500 company. As a product-oriented company, Sineng always looks at its offers, and we are eager to make products and services better
Any other comments?
Global solar systems are expected to reach 142 GW in 2020, an increase of 14% over the previous year. In the China-led Asia-Pacific (APAC) region, data power plants are forecasting to remain the largest regional market for PV systems. However, solar demand in 2020 will be lower than historic installation peaks of 50 GW in 2017. Although the US is predicted to replace India’s position, it will still be well above its weight in world market share. The international solar community sees India as a very large market for solar energy. The renewable capacity target of 175 GW, of which 100 GW solar seems achievable by 2022 with the right policies.
Photo credit: Sineng
Nithin is an employee reporter at Mercom India. He previously worked for Reuters News on the oil, metals and agricultural commodity markets in the world markets. He has also covered refinery and pipeline explosions, oil and gas leaks, hurricane developments in the Atlantic region, and other natural disasters. Nithin holds a master’s degree in applied economics from Christ University in Bangalore and a bachelor’s degree in commerce from Loyola College, Chennai. More articles from Nithin.