Electric carmaker Tesla Inc. is scouting for local partners to make its rooftop solar panels in India, a person aware of the matter said. The selected partner will help with the manufacturing and installation, while Tesla will provide technology and sales expertise.
The Elon Musk-led company has already conveyed its plans to the government and requested subsidies and other grants for the venture, the person cited above said on condition of anonymity.
Apart from its mainstay business of electric cars, Tesla also makes several home power products covering solar power generation and storage. These include Solar Roof, which replaces conventional thatched roofs with photovoltaic tiles; Powerwall, a battery power storage unit; and solar panels.
Tesla’s India plan comes at a time its US solar business has slowed, with December quarter deployments falling 59% to 41MW from 100MW a year earlier, the worst since 2020. Meanwhile, India provides incentives to encourage the rooftop solar sector. Some domestic companies in the rooftop solar segment include Tata Power Solar, Adani Solar, Servotech Power Systems and Waaree Energies.
Emails sent to a Tesla’s press team seeking comments remained unanswered.
Tesla entered the solar rooftop business in 2016 through the $2.6 billion acquisition of SolarCity, founded by Musk’s cousins Lyndon and Peter Rive. At the time, it was the US market leader with just over 800MW installed.
Analysts tracking the sector said India’s solar rooftop capacity has grown at a compounded annual rate of 47% over the last five years, presenting a sizable opportunity.
India’s total installed rooftop solar capacity was 11.1GW as of December, said Girishkumar Kadam, senior vice-president and group head of corporate ratings at Icra Ltd. While the bulk of this capacity is with commercial and industrial users, residential capacity has also grown significantly, reaching 2.7GW.
“However, the installed rooftop capacity fell significantly short of the 40GW target that the Union government had set by the year 2022,” Kadam said.
The Pradhan Mantri Suryodaya Yojana, announced in January, aims to bring rooftop solar projects to 10 million houses, each of which generate up to 300 units of electricity per month and achieve savings in electricity cost, Kadam added. The scheme, which allows the use of only locally made solar modules, could create 20-25GW of demand opportunity for domestic solar module makers.
Tesla’s solar panel plans come at a time when the company is also engaging with the Indian government for bringing its electric cars to the country. The company has sought several concessions including lower import duty rates for its vehicles.
The company is reportedly willing to invest up to $2 billion for setting up a factory in India if the government gives it a concessional duty rate of 15% on imported cars for the first two years of its operations, compared to 70-100% at present.
Tesla’s India plans gathered steam again after Musk, the company’s mercurial chief executive officer (CEO), met Prime Minister Narendra Modi during the latter’s US visit in June. Subsequently, India’s minister for commerce and industry Piyush Goyal visited Tesla’s factory in Fremont, California, in November.
Indian officials and Tesla executives have engaged multiple times since to thrash out the finer details of the company’s entry into India.