In my previous blog post, I had mentioned the report on the Indian solar PV industry prepared by the India Semiconductor Association (ISA). Some of the key findings of the report are given below. While there are some encouraging signs, there are challenges as well, that require the industry's full attention. First, although the Indian solar PV industry is currently operating at a smaller scale as compared to other solar PV producing nations, the production in our country is said to be very cost-effective. Also, the price competitiveness of Indian solar PV industry has now made it a preferred destination and vendor for end users, especially in countries such as Spain and Germany – two of the world's leading solar PV markets. Next, several initiatives have already been put in place by the government of India for solar PV production. The Jawaharlal Nehru National Solar Mission (JN-NSM) is an instrument or document that is being used to promote the application of solar PV in the domestic market. It is hoped that all of these will give the Indian industry a decisive edge over other competing nations. However, there are serious causes for concern as well. To begin with, as of now, India lacks a manufacturing base for the basic raw materials required for solar PV production – silicon wafers. Currently, the industry is relying on imports to source the raw material. One hopes that this concern will be addressed over the coming years. It has also been pointed out in ISA's report that the silicon market has been fluctuating in the past, thereby leading to an imbalance in the current demand-supply equation, as well as the fluctuating prices and the availability of raw materials. As things stand, silicon production capacity is much higher than the demand and prices are at significantly low levels as compared to a year ago. Earlier, some of the solar PV firms had entered into 'rate contracts with silicon wafer suppliers' to ensure the availability of raw materials. However, it is now being cautioned that with a sudden reduction in prices, such contracts may now prove to be a loss making proposition. Hence, care and due diligence needs to be paid at this end as well. Also, price reduction continues to pose a major challenge to the industry and could well impact the market's future growth. Finally, the report outlines the fact that over the last five years, China has become the top-ranked producer of solar cells in the world. This makes China based producers a major threat to the Indian industry. As per the report, China currently has about 2,500 MW of production capacity for solar PV as against India’s 400 MW. If this isn't enough, even Taiwan, with an annual capacity of 800 MW, is emerging as a major threat to the Indian industry. The challenges posed by the Greater China region is something India needs to be wary of. There is loads to be done before the Indian solar PV industry can really come of age and be a top ranked solar PV producer in the world. Pradeep