MNRE working on new scheme for solar PV manufacturers: Joint Secretary

• The incentives would range from capital costs at cheaper rate to cheap electricity, duty exemptions, among others, said the top MNRE bureaucrat

• Sinha said that foreign global players look at India as a global manufacturing hub for both wind energy and solar energy equipment

New Delhi: In order to push domestic solar PV manufacturing, the Ministry of New and Renewable Energy (MNRE) is working on a new scheme under which the Centre will offer a number of incentives to investors, ranging from capital costs at cheaper rate to cheap electricity, duty exemptions, among others, said a top bureaucrat on Friday. Amitesh Kumar Sinha, Joint Secretary at MNRE, said that the government is aware of the challenges facing the domestic solar gear manufacturing industry in terms of the competition posed by cheaper alternatives available in countries like China and is prepared to provide them the right ecosystem and facility for growing the industry's capacity and making them price-competitive.

What is the new scheme going to offer to solar gear manufacturers?

Addressing a webinar on Making India's Solar PV Manufacturing Self-reliant, organised by Council on Energy, Environment and Water (CEEW), Sinha said, "We are working on a new scheme where we will try to provide manufacturers capital cost at cheaper rates. We will also provide electricity at cheaper rates and some more incentives from our side." He added that the government is also in talks with the Department of Revenue and the Department of Heavy Industry in order to get duty exemptions on capital goods.

Also read: Geopolitics spurs India to become dominant player in global RE supply chain

The senior bureaucrat added that the Centre has also set up a project development cell at MNRE to hand-hold domestic, as well as foreign investors, right from the beginning till the end. "We will soon finalise four-five locations where we can direct investors for setting up a manufacturing base, in case they seek our help with it," the MNRE Joint Secretary said. The government is also planning to offer land to investors near ports for setting up solar manufacturing businesses.

'Foreign players look at India as global manufacturing hub'

While speaking about the kind of interest received from global players towards the Aatmanirbhar Bharat Abhiyan announced by the government, Sinha said that foreign global players look at India as a global manufacturing hub for both wind energy and solar energy equipment. Sounding optimistic about global investor sentiments towards India, the top official, who heads the project development cell at MNRE, said, "On the basis of the kind of interest that we have received from global players, I can say that very soon, you will see that 10 GW of wind power equipment manufacturing capacity will grow to 15-20 GW. And I am seeing a similar trend in solar power gear manufacturing as well."

'Expect solar PV manufacturing cost to come down in 2-2.5 years'

The senior bureaucrat said that as soon as there is more competition in the market, the prices of solar PV manufacturing is going to come down. "With increase in manufacturing capacity, there would be enough competition. And that will drive the cost down. I think that the present gap of 20 percent between the prices of domestically-produced and imported solar power equipment will reduce in the next 2-2.5 years," he said.

What should you know about the solar manufacturing industry in India?

Even as India is implementing the world's largest solar energy programme, the solar power equipment market has been dominated by Chinese companies so far. Around 80 percent of the total solar cells and modules used by solar power developers in India have come from China because of their competitive pricing. However, in the wake of a rise in border confrontation with China, India has decided to tighten the noose around Chinese imports and boost domestic manufacturing. 

There are two main challenges facing India in its bid to boost domestic manufacturing — first, increasing domestic solar manufacturing capacity (currently, India has a domestic manufacturing capacity of only 3 GW for solar cells) to meet the developers' demand, and secondly, make solar PV equipment cost-competitive. 

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)