Cabinet Approves Second Tranche of PLI Scheme For Solar Module Manufacturing

The second tranche / phase of the Production Linked Incentive (PLI) scheme for the advancement of solar PV modules, with an outlay of Rs 19,500 crore, was approved by the Union Cabinet on September 21.

In a press conference held after the Cabinet meeting, Union Minister Anurag Thakur stated that the PLI for the “National Program on High-Efficiency Solar PV Modules” aims to achieve a manufacturing capacity of “Gigawatt (GW)-scale in high-efficiency solar PV modules.”

“A provision of Rs 19,500 crores has been made,” Thakur said, adding that the government wants to create an “ecosystem for manufacturing of high-efficiency solar PV modules”.

In a formal statement, the Centre stated that the program will result in a “direct investment of around Rs 94,000 crore,” about 1,95,000 direct jobs, and roughly 7,80,000 indirect jobs. The bid design is such that there are three baskets.  Rs 12,000 crores has been earmarked for fully integrated capacity, which is polysilicon to wafers to cell to modules. Rs. 4500 crores for a three-stage integration, first cells to modules, and Rs. 3000 crores for integration across 10 cell modules.

Indian Renewable Energy Development Agency Limited (IREDA) is likely to be the implementing agency of this program too, like the previous tranche of Rs 4500 crores.

Last year, the first tranche received approval. In December 2021 and November 2021, the bids were chosen. For the budgeted payment totaling Rs 4500 crore,  8.7 gigawatts of integrated capacity in total were allotted under the first tranche. Through the entire solar value chain, from polysilicon to wafers, ingots, cells, and modules,is captured in this integrated capacity plan

According to the government, the solar PV manufacturers who will benefit from the PLI scheme will be chosen in a transparent selection process. It was added that the incentive would be paid out for five years following the commissioning of the solar PV manufacturing facilities “on sales of high-efficiency solar PV modules from the domestic market.”

The government is anticipating that 65,000 MW of annual manufacturing capacity for fully and partially integrated solar PV modules would be installed. According to the government, the program will result in “import substitution of roughly Rs.1.37 lakh crore” and will also stimulate research and development to produce solar PV modules with higher efficiencies.

Through ALMM and DCR, the government is already promoting the in-house manufacturing of solar cells and modules. This scheme will add up to that and will encourage more players to venture into setting up solar cell and module manufacturing in India.

Currently, even without this PLI scheme, domestic manufacturing capacity for modules  is on track to hit over 25 GW by 2024-25. The MNRE minister, R.K. Singh has indicated that legacy, obsolete capacity will have to be discarded too, as the government sets higher efficiency standards for modules going ahead.