The plan submitted by the Indian Finance Minister for the photovoltaic incentive plan is expected to bring new opportunities for the photovoltaic industry to sea
According to the report released by jmkresearch, the installed capacity of new PV in India in 2021 exceeded 10GW. On February 1, 2022, the Minister of finance of India submitted the plan of photovoltaic support plan, which mainly includes: (1) allocate US $2.602 billion to encourage India to build the industrial chain from polysilicon to module, and give 15% preferential tax rate to new enterprises in the first year; (2) From April, the tariff of imported photovoltaic modules will be raised to 40% and that of batteries to 25%; (3) Launch green bonds to support the development of clean energy. We judge that: (1) photovoltaic enterprises with battery module plants in India are expected to usher in new opportunities, including Longi Green Energy Technology Co.Ltd(601012) ; (2) The strong demand for installed capacity is expected to drive the profit growth of downstream inverters, power stations and other enterprises that have built plants in India, including Risen Energy Co.Ltd(300118) , Sungrow Power Supply Co.Ltd(300274) ; (3) Chinese silicon material enterprises also benefit, such as Tongwei Co.Ltd(600438) .
In the short term, the export of battery modules will be under pressure, but the Indian photovoltaic market still depends on China's import
In the short term, affected by the tariff increase, the export of battery modules will be under pressure, but the Indian photovoltaic market still depends on China's import. (1) As China's largest exporter of photovoltaic cells, India will levy a 14.9% guarantee tax on Chinese cells and modules before the end of July 2021. From August to April 2022, due to the expiration of the policy, Chinese photovoltaic cells and modules have an eight month tax holiday in India. The plan will raise tariffs on components to 40% and batteries to 25%. In the short term, China's batteries and components exported to India will be under pressure. (2) At present, more than 80% of the modules in India's photovoltaic market come from China and are heavily dependent on Chinese imports. While the Indian government has set a target that the cumulative installed capacity of PV will reach 100gw in 2022 (only 49gw by the end of 2021), the capacity of local cells and modules in India is only 3gw and 15gw, which is far from meeting the market demand. Therefore, even if the policy is implemented, the import dependence of India's photovoltaic market on China will continue in the short term.
In the long run, the proposal will benefit the global photovoltaic enterprises in India
The incentive plan aims to promote the construction of the industrial chain from polysilicon to components in India, and its subsidies and preferential tax rates will be better than the photovoltaic enterprises that have been laid out in India in the early stage. The incentive plan includes a grant of US $2.602 billion to support the construction of the industrial chain from polysilicon to photovoltaic modules in India, and provide a preferential tax rate of 15% for newly established enterprises in the first year. Therefore, not only the enterprises that have invested and built factories in India in the early stage can benefit from the rise of tariffs, but also the enterprises that build factories in the future can benefit from policy subsidies. In addition, the cumulative installed capacity target of India in 2030 is 280gw. The strong demand is expected to drive the profit growth of downstream inverters, power stations and other enterprises that have invested in India. As the current output of silicon material in India is much lower than that in China, and the tariff does not involve silicon material, Chinese silicon material enterprises are also expected to benefit.
In the future, the average annual installed capacity of India may exceed 25gw, and enterprises in the broad market are expected to usher in new opportunities
According to the calculation of the plan, the average annual installed capacity of India in the future may exceed 25gw, while only 10GW will be added in 2021, which has a broad market space. By the end of 2021, the cumulative installed capacity of photovoltaic in India was only 49gw, while the plan mentioned that the installed capacity target of photovoltaic in India in 2030 was 280gw, so the average annual installed capacity of India in the future may exceed 25gw. In 2021, the new installed capacity in India was only about 10GW, and there is still more than 15gw of growth space. According to the prediction of the international renewable energy organization, the new installed capacity in the photovoltaic market of China, the United States and India is expected to reach 100 GW in the next five years. However, considering that the current annual new installed capacity of China and the United States has reached about 55gw and 24gw respectively. In horizontal comparison, the growth rate of new photovoltaic installed capacity in India ranks first in the world, and the global photovoltaic enterprises arranged in India are expected to usher in new opportunities.
Risk tips: changes in the plan, slow construction of factories in India, fluctuations in photovoltaic demand in India, tariff fluctuations, etc.
