Solar technology in India: A way out of the crisis for European solar firms?

Abstract

The solar sector has been booming over the last years in France and Germany and has especially been in Germany the example of growth of a renewable energy source. The sector saw a significant growth of firms and jobs. However over the last two years the situation of the solar sector has worsened significantly. France and Germany both cut government subsidies for the solar industry. Furthermore the Chinese government has massively supported the production of solar technology, which lead to fierce competition on the world market, and a wave of bankruptcies among German firms. The struggling sector is at a crossroads right now and has to find new ways on how to stay profitable on the global market. One Strategy for French and German firms could be to search for growth potential in India. India may appear as a great opportunity as it is a big country with high energy needs (India’s electricity need is supposed to double until 2030). The solar energy potential in India is immense due to its convenient location near the Equator. India receives nearly 3000 hours of sunshine every year, which is equivalent to 5000 trillion kWh of energy. India can generate over 1,900 billion units of solar power annually, which is enough to service the entire annual power demand even in 2030 (estimates). Considering India’s solar potential, the Indian government has rolled out various policies and subsidy schemes to encourage growth of the Solar Industry, which is expected to experience exponential growth in the coming years. This paper will try to shed light on the principal question if European solar firms should try to use the Indian market as an opportunity for growth. The paper will approach this issue through the following steps. It will first give a world energy outlook to provide the context of solar energy in comparison to other forms of energy worldwide. Afterwards the solar energy technology shall be introduced and defined. Afterwards the solar energy markets of France, Germany and India will be compared and also put in an international perspective to specify the context in which solar firms have to operate as regards to market development and regulation. Finally, a case study of solairedirect a French company that installs solar panels worldwide but also massively in India shall give insights about one approach that can be taken by European firms to gain access to the Indian market.