Recently, I chanced upon an article in Forbes India which profiles Deepak Puri, Executive Director of Moser Baer, one of India’s largest PV manufacturers. This article chronicles Moser Baer’s entry into solar PV manufacturing and how the industry dynamics destroyed the solar division of this illustrious company. The following passages in the article sum up most of the troubles faced not only by Moser Baer, but also the Indian PV manufacturing sector.
– “It was October 2005. Ratul Puri knew he had made an impact. In his 77-slide, lengthy PowerPoint presentation to the Moser Baer board, he stated upfront: “Companies in the photovoltaic space are witnessing increasing revenues, profits and high valuations. During the last five years actual growth in the photovoltaic industry has outstripped projected growth by a factor of two. Demand potential of photovoltaic in India is expected to be in excess of 1,000 MW.” “
– “By 2008, when Moser Baer was just about getting ready for its solar play, the world was hit by a severe financial downturn. And almost overnight, the solar business’ economics changed completely. Till then the photovoltaic manufacturing industry was exploiting the price difference between polysilicon and the demand for solar cells. As the supply of polysilicon increased, its prices began to fall, while at the same time the economic crisis resulted in cutbacks in solar subsidies across Europe which accounted for more than 60 percent of solar panel demand in the world. To make matters worse, banks developed cold feet and most companies in the solar sector found it extremely difficult to secure funding.”
– “It also seems Puri had completely underestimated China’s manufacturing potential, which benefitted from the country’s ability to build huge factories quicker and cheaper than any other nation in the world. This was largely due to its inexpensive, efficient construction crews and a process that permitted streamlining. So, while Moser Baer was still taking baby steps in solar, China became the world’s largest manufacturer of solar panels. “
This article raises a very important question – if a dynamic company like Moser Baer faces such a dire situation in the solar PV manufacturing, do other Indian PV manufacturers stand a chance to thrive in this sector? The answer, unfortunately, seems to be no. Unless, of course, the government steps in in a big way, which again is a big question mark.
3 thoughts on “Moser Baer – A good case study of what went wrong with Indian Solar PV Manufacturing”
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How long Indian Industry wish to thrive on Govt. help/ Subsidy dose ? They need to effecient like China or perish. I think Mosar was and still is good in CD business and China has not been able to impact them in that shpere, right ? Why because they became effecient in doing Cd business.
Government help/subsidy is like a diet supplement. It is needed when a whole new manufacturing sector is developing in a country, government should take necessary steps & see that the industry earns legitimate profits.
China has so many attractions for manufacturers like liberal labor laws, ease in government permissions etc.
+1 Joshi. We need to understand that an Industry needs an efficient ecosystem to be competitive in its processes, R&D, market reach, so on. Unless Govt. provides a level playing field to Indian manufacturers to overcome this handicap (as compared to China), it wouldn’t be prudent to expect the industry to stand the onslaught of low-cost Chinese panels.
Considering the prices at which solar panels are being imported from China, I wonder if they are making any money out of it or just clearing their excess inventory to survive.