PLI scheme: India to set up 10,000 MW solar PV manufacturing plants by Q4 of FY23

• Under the scheme, the government has committed nearly Rs 1.97 lakh crore over five years, starting FY 2021-22

• The EFC meeting for formulating a scheme in this regard has already been held and it will now be taken to the Cabinet for final approval

New Delhi: Under the production linked incentive (PLI) scheme announced by Finance Minister Nirmala Sitharaman in Budget 2021 for the renewable energy sector, India plans to set up 10,000 MW capacity of integrated solar PV manufacturing plants (from manufacturing of wafer-ingot to high efficiency modules) by Q4 of 2022-23 with the direct investment for around Rs 14,000 crore, said the Ministry of New and Renewable Energy. "For manufacturing sector to grow in double digits on a sustained basis, manufacturing companies need to become an integral part of global supply chains, by possessing core competence and cutting-edge technology," said the ministry.

Accordingly, PLI schemes to create manufacturing global champions for an Atmanirbhar Bharat have been announced under Budget 2021 for 13 sectors, including the manufacturing of 'High Efficiency Solar PV Modules.'

Solar PV manufacturing PLI scheme: Govt commits Rs 1.97 lakh cr over 5 years

Under the scheme which will be will be implemented by Ministry of New & Renewable Energy (MNRE), the government has committed nearly Rs 1.97 lakh crore over five years, starting FY 2021-22. This includes Rs 4,500 crore for 'High Efficiency Solar PV Modules.' "It will help bring scale and size in Solar PV manufacturing, create and nurture global champions and provide jobs to youth. The PLI schemes will incentivise new Gigawatt (GW) scale solar PV manufacturing facilities in India," said the MNRE. 

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The EFC meeting for formulating a scheme in this regard has already been held. It will now be taken to the Cabinet for final approval. The scheme will reward efficiency of solar modules as well as local value addition.

The backdrop

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.

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