INDIA'S SOLAR BOOM SHOWS 'CHINA' CRACKS

A massive solar module oversupply in India could force a painful industry consolidation. Who will survive?

- Megha Mandavia

An automated module assembly plant in operation at Premier Energies. The company, and other Indian solar equipment makers, have raced to expand their solar module capacity.

From the industrial belts of Gujarat to the outskirts of Bengaluru, factories are churning out solar panels by the millions, their glassy surfaces stacked and shipped across the country.

Utility developers, homeowners and farmers are lapping them up, feeding the surge in India's clean energy push.

For years, India has been hailed as the world’s most credible challenger to China 's command over the solar supply chain. Backed by government incentives and trade protections, Indian solar equipment makers such as Adani Enterprises, Tata Power, Renew Photovoltaics, Waaree Energies and Premier Energies have raced to expand solar module capacity to help meet the country’s ambitious target of installing about 300GW of solar energy by 2030. Reliance Industries also announced extensive plans to build capacity in the space.

But the early boom is showing cracks. Initial public offerings (IPOs) of Indian solar equipment makers have previously been heavily in demand, but the latest listing of Emmvee Photovoltaic Power ended up with mixed demand. The retail and qualified institutional buyer (QIB) portions were fully booked, but the non-institutional investor (NII) portion remained significantly undersubscribed at 30% in November.

This shift may be due to the large number of clean technology listings, overheating in the country’s module manufacturing segment, the unexpected disappearance of US export potential due to tariff wars, and investors’ closer focus on weakening domestic demand, at least in the short term.

According to BNEF, a commodities research firm, Emmvee's IPO got about one bid per share on offer, versus Waaree's 80 bids per share during its IPO last year. At least nine more Indian solar manufacturers have plans to go public.