Trade protection for domestic manufacturers is misguided, finds Bridge to India

According to reports from analysts Bridge to India, module manufacturers contribute only a minuscule amount of the total economic benefit from the solar sector.

The contributions break down as follows: 80% of total job creation comes from downstream activities, and 87% of value creation happens from downstream activities. Also, in upstream activities the majority of job and value creation happens in balance of system activities.

The study indicates that 1 GW cell and module manufacturing line creates 1220 jobs. Whereas manufacturing of inverters and balance of system components for the same capacity creates 3 times as many jobs. The point is most of the jobs are created from project construction and operation.

Extrapolating these numbers with 10 GW solar capacity addition, which would be split into 80% utility scale and 20% rooftop solar, the proportion of total jobs created by module manufacturing is just 4 % whereas operation is 82 %.

Similarly, for economic value creation, the report states that 10 GW capacity creates INR 542 billion ($ 8.4 billion) of total economic value. The module manufacturers would create just 10% of economic value in contrast to power generation which would create 87% economic value.

Thus, the analysis suggests that the majority of job and value creation comes from project development and power generation. Hence, the government needs to ensure that this is not hampered by takin steps which could stall the solar growth in India. There should be genuine policy reform to boost investment in R&D, creation of supply chain and associated infrastructure, rather than imposing barriers to trade.

Such duties may create decelerate the momentum that India has shown in last year in development of solar and might bring foggy days ahead in this sector.