Plans in Place to More Than Triple Local Solar Manufacturing Capacity

The government has proposed a major push to domestic manufacturing of solar equipment in the country that would completely eliminate the need for imports

The central government has proposed a major push to domestic manufacturing of renewable energy (solar) equipment in the country that would completely eliminate the need for imports, particularly from countries such as China.

As part of the plan, an accelerated manufacturing plan is being operationalised that is incentivising setting up of solar cell manufacturing capacity of 4,000 MW that would allow project developers to restrict the import of this product completely.

Additionally, 3,000 MW of fresh solar cell capacity is being added under manufacturing linked bids for solar projects. This would incentivise power project developers planning to manufacture in India.

The current capacity of solar cell manufacturing in India is about 2,500 MW. This is proposed to rise over three times in the coming years. In the case of solar modules as well, 7,000 MW of capacity is being added in addition to existing capacity.

Power minister RK Singh had said earlier that under the ‘Atmanirbhar Bharat’ mission, domestic manufacturing capacities would be expanded at a rapid pace for meeting goals towards import substitution. The plan for the renewable sector, he had said, should not only be sufficient to meet the country’s needs but would also support exports and earn the country valuable foreign exchange.

As reported by us earlier, the Minister had confirmed in a press conference that duties, possibly starting at 25 percent, will be imposed on module imports from August 1. He wasn’t absolutely certain on duties for cell imports but indicated they would be treated at a lower rate, possibly 15 percent. It is also not clear if customs duties on imports may be spread wider this time, beyond China and Malaysia as was done in the case of the safeguard duty.

Without a clear case for dumping, doing that again might not be as simple. Besides, with China-based firms able to supply from plants in Vietnam, Singapore, etc, it also may lead to leakages in the original intent.

During his discussions with the media, Singh indicated that duties on solar cells might move to 30 percent after a year, indicating a strong hope to see some steps in manufacturing those too. The minister also remained adamant that the 175 GW target for renewable energy, set for the end of 2022, will be met.