PV Tech can reveal that our head of research, Dr. Finlay Colville, will deliver a one-hour presentation seminar during the forthcoming PV IndiaTech 2019 conference taking place in Delhi on 24-25 April 2019.
The talk – titled Global manufacturing trends, benchmarking: how India competes as a production powerhouse in the PV industry from 2020 onwards – will provide the Indian PV sector with key metrics needed to evaluate the viability of upstream investments demanded under the country’s emerging domestic-content requirement policies.
Ahead of Finlay’s talk – scheduled to close the final day of PV IndiaTech 2019 on 25 April 2019 – PV Tech took the opportunity to chat with Finlay about what to expect from his seminar, and the drivers behind the content and value of such a presentation at the event.
Mark Osborne: Thanks Finlay for taking the time to preview the PV IndiaTech 2019 event, the full details of which were recently covered in a blog on PV-Tech earlier this week. Can you start by explaining what prompted you to undertake a one-hour seminar assignment as part of the agenda over the two days of the event?
Dr. Finlay Colville: Most times at events, my inputs are limited in scope and often confined to specific global PV issues within a 20-30 minute presentation slot. However, this time, a longer and more detailed talk was deemed to be of value due to unique circumstances impacting the whole India PV value-chain today.
During the research our team has undertaken over the past six months, through hundreds of discussions with the entire Indian PV sector – from government bodies, policy-makers, investors, manufacturers, suppliers, site builders and asset owners – it became clear that everyone in India has a fundamental need to understand global technology trends and how changes under the broad Make-in-India initiative will impact component production and site supply during the decade from 2020 to 2030. By 2030, India is likely to have surpassed its long-term aspiration to have more than 300GW of PV deployed and a significant portion of this will involve cells, modules, materials and BoS components that are produced by Indian companies or JV’s involving partnering overseas entities.
Virtually everyone we spoke to asked us what the real technology roadmap of the PV industry would be, which companies were driving the benchmarks for product performance, cost and pricing, and critically what India should invest in to be competitive with product coming out of China.
It therefore seemed important that a one-hour seminar could be of great value at the event, with our research and methodology adopted within the PV-Tech market research team offering an unbiased bottom-up perspective.
Is it simply a case of India adding more cell lines that are based on p-mono PERC, or is it more complicated than this?
In short, it is much more complicated, and way more far-reaching than simply adding a few gigawatts of mono PERC that is now a 50GW+ manufacturing industry installed within China, and where some leading cell makers are intent on adding tens of GW’s of new capacity in the next few years.
The decision-making within India today includes more basic questions such as:
• Should the investments covered under DCR policies be confined to cells and modules, or is there a viable roadmap where poly/wafer capacity can have any viability and global significance?
• If wafer production is chosen, how does the country possibly compete with leaders such as GCL-Poly and LONGi Solar?
• What role does thin-film play, given this is a technology that has seen huge investments in recent years from the industry’s leader First Solar – a company that has huge experience of setting up GW-level fabs globally with efficiency of build and ramp-up.
• Should investments be based on having a large number of 500MW to 1GW factories, or is there a need to back a small group of technologies/companies and drive economy-of-scale benefits in 5-10GW operations?
• How do the investments translate to having materials supply for cell/module assembly covered under Make-in-India mandates, and what needs to be ringfenced also at the balance-of-systems level?
The key thing India has in its favour here is based on the 300GW by 2030 target, and probably being the lowest-risk 100GW-plus deployment country in the world during the decade from 2020 to 2030. This simple fact means that every major company making, using and owning solar products and assets either has, or will have soon, an India-specific business plan to cover the next 10 years.
Therefore, India does have an incredibly powerful hand to play in setting out the ground rules for what this 300GW will look like, and crucially how it must come to fruition alongside a viable and profitable manufacturing sector.
So while, every solar company globally should be aware of technology trends and price/cost forecasting, India has to quickly be up-to-speed across every segment of its industry, from government advisers thought to IPPs and long-term portfolio owners.
There have been many announcement though in the past ten years of JV’s, MoU’s and initiatives, almost all of which have come to nothing. So what is different now?
Yes, there was a time when the announcements were barely worth reading, but in the past 12 months, lots of things have happened that have changed the landscape and relevance of the country for inward investment and domestic-owned capacity expansions.
First, the country now has 25GW-plus of deployed solar capacity, and the stats in terms of cell and module supply do not make happy-reading for many within India, as more than 90% has been imported from China. And a large portion of this has been product that is lower-performing than cells and modules used in other global regions.
Attempts to have anti-dumping and other import tariff based additives placed on overseas origin-of-manufacture have not had any meaningful impact, very similar to every other case of AD-related actions taken within the solar industry.
Crucially, the WTO-compliant DCR carve-out allocations now dominate policy-makers intentions and this changes everything for domestic production within India.
Different today also is that the PV industry has gone through a rapid evolution of high-efficiency and yield-enhancing product availability for utility-scale solar farm deployment. We are now at a time in the growth of PV where simply being the lowest-cost producer of p-multi mono-facial Al-BSF product wins out. And this is driving productivity gains at a rapid rate, and now there is scope for technology differentiation and ASP premiums that are clear winners when forecasting site returns and IRRs to the finance community. Technical due-diligence within the banks is real, and works!
Returning to your one-hour seminar at the event, can you give some teasers as to what you will be covering?
Anyone that has tuned into my online webinars during the past few years will be aware roughly of the topics covered when looking at manufacturing value-chain metrics, and the seminar at PV IndiaTech will broadly follow these guidelines, but focused on “what does this mean for new capacity within India, and how can it compete and be of value to developers and EPCs in the next few years”.
The seminar will start by looking at the likely technology split for module supply globally over the next five years, including some of the factors that drive inflection points in technology availability. This will be followed by going through the c-Si value-chain, from poly to module, explaining the cost benchmarks for both p-multi and p-mono and how this sustains further ASP erosion going forward.
In particular, the talk will focus on the companies that are the drivers behind low-cost manufacturing, for polysilicon, wafers, cells and modules. This is essential today, as this sets the low-cost threshold that everyone is judged against and is the difference between margins being positive or in the red.
The tricky bit comes next and is the question that the entire Make-in-India solar proposition is founded on: how can India prosper when investing in new manufacturing capacity going forward, and how can it compete with China. One can almost forget other countries outside India in terms of benchmarking: everything is about China as the benchmark.
So, one final question. Do you think there will be one clear call-to-action or will the debate rumble on for years to come, in terms of how India adds new capacity and is competitive on the global stage?
The good thing is there is no single route to be competitive going forward, but several. Everything does come back to investor returns and not module ASP or site-build capex. It seems simple and obvious to say, but all too often when solar farms builds kick off in countries, this is not fully implemented.
When you look globally at how utility-scale market evolve, there is a transition point from EPC driven site capex to investor-driven site returns. India would appear to be pending this key inflection point, but the more that completed site builds come under the spotlight in terms of performance ratio reviews, the more likely investors are to have an influence on capex, supplier choice and – importantly – technology selection.
Therefore, whether the offer is p-multi, p-mono PERC or n-type, there are attractive IRRs on offer going forward in the next few years, but in each case, product quality and supplier selection are paramount, and the role of third-party testing labs, factory auditors and independent engineers.
This means there is no binary selection process in terms of technology for new capacity, but more the requirement to focus on being aligned with benchmarks whether n/p type or mono/multi based, or in that matter mono-facial/bifacial, and so on for fixed-axis or tracking.
A few years ago, project development and module selection was weighted largely to p-multi (60 or 72-cell), but globally this has moved dramatically in the past few years. India will make this move in the next 12-18 months, at exactly the point where new manufacturing capacity comes online. As such, it would appear prudent to have knowledge on which technologies will be part of industry supply for utility-use in the next few years, and how each can offer returns to investors, with reliable and predicable yields.
The PV IndiaTech 2019 event takes place in Delhi on 24-25 April 2019. Details on how to attend can be found through the event website here.