Insolation Energy: This Stock Has Run Up 4200% In 18 Months. More To Come?

Government Push

On January 22, Prime Minister Narendra Modi launched the PM Surya Ghar Scheme to provide a subsidy of up to Rs 78,000 per household for the installation of solar panels. The scheme has an outlay of Rs 75,021 crore. Currently, it incentivizes up to Rs 30,000 for each two-kilowatt installation and Rs 18,000 for the third kilowatt.

Application for the subsidy can be made through the National Portal on the PM Surya Ghar Scheme. Apart from household use, excess electricity can be provided to the national grid, leading to additional compensation.

This could help boost sales for Insolation Energy.

Insolation Energy avails benefits under the Export Promotion Capital Goods Schemes.

As per licensing requirements under the scheme, the company has to export goods of a defined amount. If the company fails to do so, it would have to pay the government a sum equivalent to the duty benefit enjoyed by them, along with interest.

While China is the world’s largest manufacturer of solar modules, it is also facing several challenges, mainly trade tensions with the US and EU. These challenges are creating an opportunity for Indian solar module manufacturers to gain market share, as Waaree Energies Ltd. mentioned in its Draft Red Herring Prospectus in 2023.

The US and EU are currently implementing regulations to promote the use of renewable energy, including solar energy, which creates a large market for solar modules, as mentioned in Waaree Energies' statement.

While India's solar module manufacturing capacity is expected to reach 90 GW to 95 GW by 2028, domestic demand is estimated at 40 GW to 45 GW in the same year, according to Waaree Energies. This indicates that India will have a surplus of solar modules that can be exported to other countries.