China, the world's clean energy juggernaut, faces rivals right next door. And one of its top customers is no less than that.
India, a large buyer of solar panels and electric vehicle batteries in China, uses a ton of government incentives to make greener gear at home. It is not only driven to meet the galloping energy needs of 1.4 billion people, but also to cash out the US, especially to other countries that want to withstand China.
India is still small and late participants. Last year, it produced around 80 gigawatt solar modules, but China produced more than 10 times that. India remains tied to coal, the dirtyest fossil fuel. Coal is the largest source of electricity, and India plans to mine it in search of more.
However, India is actively seeking to capitalize on the global energy transition and the repulsion against China's dominance of new energy technologies.
The government is offering favorable subsidies for locally produced solar cells and batteries, restricting foreign products with the largest renewable energy projects, in an effort to fuel the clean energy production boom. For example, by the end of the decade, businesses will have to make panels at home to win government contracts to install rooftop solar for 27 million households.
New Delhi has social, economic and geopolitical mandates. China is the most terrifying rival, and the two countries have gone to war over border conflicts in the past – therefore India's quest to build solar, wind and electric vehicles factories is partially designed to secure an energy supply chain. At the same time, India wants to create a manufacturing job with a good salary.
Still, India faces a dilemma facing many other countries. Buy renewable energy technology as cheap as possible from China or spend more on making products at home.
“Strategically, manufacturing capabilities are needed to ensure energy independence,” said Sudeep Jain, additional secretary of India's Ministry of New and Renewable Energy. “Now, there's a cost ruling.”
