India’s plans to develop 100 gigawatts of solar energy by 2022 just received a huge strategic boost from the nation’s largest private company.
Reliance, once known for its oil-and-gas operations (and owned by the nation’s richest man, Mukesh Ambani) has acquired the Norwegian solar manufacturer, REC Solar, and the Indian solar energy manufacturer Sterling & Wilson Solar, for around $1.1 billion in a bid to expand India’s domestic solar business.
As Bloomberg news reported, the deals align with Indian Prime Minister Narendra Modi’s goal of massively expanding renewable power capacity to 450 gigawatts by the end of the decade.
The deal will likely see REC Solar play an integral role in the development of a massive renewable energy manufacturing facility in India that Reliance committed to build earlier this year.
In all, Reliance plans to spend around $10 billion on a 5000-acre renewable energy manufacturing hub that would be home to solar, battery, hydrogen production equipment called hydrolyzers; and fuel cells that can use hydrogen or other fuels to create electricity.
This acquisition could also provide a boost to the US solar industry, which primarily relies on imported panels.
Roughly 90 percent of solar panels installed in the US come from abroad and thanks to tariffs on some Chinese solar panels and outright bans on panels from manufacturers that make equipment in Xinjiang (where producers have been accused of using forced prison labor), supplies for panels have tightened and prices have risen.
Boosting production at REC’s new Singapore plant and the development of new manufacturing capacity in India could open up more supply for US customers and drive down costs.
So Reliance’s benefits more than just the Indian market.
Bringing more solar onto the Indian power grid will also ease demand on the country’s coal fired power plants — which are currently facing a supply shortage.
Although these projects can do little to help India with the current energy crisis it faces, solar energy (with storage) could prevent future outages and problems with the nation’s utility grid.