Tata Power Solar expands module facility, says global market uncertain

Anticipating a policy regime more conducive to domestic solar manufacturers, Tata Power Solar has ramped up itsmodule capacity in Bangalore by 60%. The company's investment in modulemanufacturing now stands at Rs 500 crore.

It now has a total production capacity to 200 MW. The expansion comes against the backdrop of extremely difficult times for the Indian solarindustry. Despite challenges, Tata Power Solar has seen an increase in demand for its products which reaffirms the faith customers put in the quality of itsproducts.

Speaking to Business Standard, AjayK Goel, chief executive officer, Tata Power Solar said, "We are primarilybanking on the demand from the Indian market and are optimistically waiting fora policy direction from the new government."He said the expansion was based on the significant increase indemand that the company has seen for its solar modules, as well as the expectedincrease in demand due to supportive policy steps announced recently by the governmentsuch as the domestic content requirement. "We are anticipating that when the anti-dumpingduties are confirmed there will be a greater demand in the domestic market."

A commerce ministry inquiry has concluded the imports are undercutting the pricesof domestic industry which has caused price under selling, suppression as wellas price depression effects. The department of commerce hasidentified a dumping margin range of 50-60% from the United States and 100-110% from China. Last two to three years, however, have been rough for the domestic industry.

Goel said further expansion would depend onmarket conditions which continued to be uncertain. Though the company would be looking at exporting as well by building its brand anddistribution network, the global market conditions continued to be uncertaindue to overcapacity. Anti-dumping on Chinese modules in the US and Europe arelittle too low to be effective, he said.

Founded in 1989, the company was originally formedas a joint venture between Tata Power and British Petroleum Solar (BP Solar). Withparting of ways with BP in 2012, the company has to rebuild its exportpresence. TPS operates as a wholly owned subsidiary of Tata Power. It has three manufacturing units in Bangalore, with a production capacity of 200 MW of modulesand 180 MW of cells.