India’s Solar Self Sufficiency Dreams Move Ahead With Solar PLI II Bids

Confirmations on the bidders for the phase 2  solar PLI (Performance Linked Incentives) scheme of the government are in, with Reliance Industries Limited (RIL), leading a host of companies that have bid for a slice of the incentives.

In the guidelines for the second phase of the solar PLI scheme where Rs 19,000 crore has been allocated, the highest share of Rs 12,000 crore has been allotted to end-to-end PWCM manufacturing (raw material to finished product). That leaves Rs 4500 crores for wafer-cells-modules, and cells-modules with Rs 3,500 crore. Thus, the focus of the sand to module manufacturing has clearly shifted to the earliest and most capital intensive part of the chain, Polysilicon Manufacturing, where India has no manufacturer currently, with the world dependent overwhelmingly on China-based firms.

Readers will recall that it was the spike in prices of polysilicon in the 2020-22 period that led the huge volatility in module prices, upsetting many calculations of solar developers worldwide, leaving behind a trail of bankruptcies and stuck projects, many of which are still unresolved. In fact, a leading Chinese manufacturer, Daqo sold 132,909 tons of polysilicon in 2022 at an average price of $32.54/kg, as compared to 75,356 tons in 2021 at $21.76/kg in 2021.  Prices have softened yet again to 2021 levels, giving many hope that module prices in 2-23 will also continue to soften, and potentially help revive many stuck projects.

For India’s phase 2 solar PLI scheme , besides Reliance, US-based thin film solar leader First Solar and Hyderabad based Shirdi Sai Electricals have also bid for end-to-end polysilicon wafer cells modules (PWCM) manufacturing for a total of 15.4 gigawatt (Gw) under the second tranche. While RIL and Shirdi Sai have placed bids for 6 GW each, First Solar has bid for 3.4 GW.

Reliance, Adani Enterprises and Shirdi Sai were also the winners from PLI I with a funding allocation of Rs 4500 crores, with Adani Enterprises replacing JSW Solar after the latter surrendered its allocation.  Incidentally, the nodal agency for the first phase was IREDA, while SECI has been roped in as the relevant monitoring agency for the larger Phase 2.

Other bidders in the Phase 2 solar PLI scheme are Tata Power Solar, Vikram Solar, Waaree Energies, ReNew Solar, Avaada Ventures, JSW Renewable, Ampin Solar and Green Energy. Adani Enterprises is notably absent, even as the firm has made significant strides in other aspects of solar manufacturing, like trackers and solar glass through the Joint venture route.

Polysilicon manufacturing being a completely novel process as compared to the rest of the solar supply chain, closer to the chemical sector than solar manufacturing, Reliance was expected to have an edge here, and the firm has duly built on that advantage.

For Indian manufacturers, a large domestic polysilicon manufacturing base at a competitive price couldn’t come sooner, as it could lend vital stability to a market where projects are planned with a 25 year life and buyers were used to stable or falling prices for almost a decade.