The Ministry of New and Renewable Energy has released a concept note of a proposal to build India’s manufacturing supply chain covering polysilicon, wafers/ingots, cells and modules to accelerate the growth of the solar photo-voltaic sector.
MNRE is proposing a slew of subsidies and incentives, including direct financial support of more than ₹11,000 crore for manufacturers to expand and upgrade, a 12 GW Central Public Sector Undertaking (CPSU) domestic content requirement (DCR) programme to create robust domestic demand, an increasing DCR requirement from modules to polysilicon, 30 per cent central financial assistance, cheaper loans, a custom duty exemption and cheaper power.
The concept note is open to comments and suggestions until December 31. The programme aims to strengthen the ‘Make in India’ campaign, reduce the country’s dependence on foreign manufacturers, and make domestic manufacturers competitive with their international counterparts.
Indian solar installations have risen from just 6 MW in 2009 to a cumulative total of approximately 20 GW to date, with another 9.5-10 GW of installations expected this year alone, according to the Mercom India Q3 Market Update.
The government is planning a three-pronged approach to support local manufacturers that includes: providing a level playing field with the imposition of anti-dumping duty on cells and modules, creating demand through a DCR programme, and supporting manufacturers financially by providing multiple subsidies outlined in this policy proposal.
To ensure a guaranteed market, the policy proposes a 12,000 MW CPSU (this is higher than the earlier proposed 7.5 GWs) programme that would have to comply with World Trade Organization rules.
If these incentives are seriously implemented and there is clear visibility for the next five years of market demand, then more manufacturers from China and other countries may decide to establish manufacturing units in India.
Preparing for tenders
The MNRE is preparing to announce tenders for solar projects in the coming four months, starting this month. Under the plan, the MNRE expects to work alongside states to announce tenders needed to reach 20 GW of ground-mounted capacity in solar parks in the 2017-18 fiscal year.
Another 30 GW is expected to be tendered in 2018-19 with 30 GW to follow in 2019-20.