Sunday, May 22, 2022

Will accommodate large no of industry players in solar manufacturing PLI scheme: Singh

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  • According to two sources, the government is planning to invite fresh bids for the solar manufacturing PLI scheme 
  • The fresh auction process is expected to have a minimum 90 percent local value addition clause and mandate at least 22 percent module performance

New Delhi: During a consultation with stakeholders on Thursday, Minister for New and Renewable Energy RK Singh promised to accommodate a large number of industry players in the solar manufacturing Production-Linked Incentive (PLI) scheme. This was the first consultation held by the government with the solar power equipment manufacturing industry after the Centre announced a hike in the PLI outlay. “Addressing the suggestions & inputs of stakeholders, Minister Singh reiterated his vision to accommodate large number of industry players & generate competition whilst ensuring quality control, self-efficiency & employment generation in the country,” Singh’s office said in a tweet on Thursday.

Govt to invite fresh bids for solar manufacturing PLI scheme: Sources

According to two sources who spoke to PSU Watch, the government is planning to invite fresh bids for the solar manufacturing PLI scheme with a minimum 90 percent local value addition clause and at least 22 percent module performance. The initial round of auction which was conducted by Indian Renewable Energy Development Agency (IREDA) last year did not mandate any specific local value addition. It only said that manufacturers will be “encouraged” to source their material from the domestic market and the PLI amount will increase with increased local value addition. 

Similarly, for module performance, bidders had to commit to a minimum of 19.50 percent module efficiency in order to be eligible for seeking incentives from the Central government under the scheme. However, the next round of auction is likely to see changes on both fronts — local value addition and solar module performance.

The government had received bids from as many as 18 entities for around 55 GW under the initial round of auction. Sources had said that four companies had been shortlisted — Jindal India Solar Energy, Shirdi Sai Electricals, Reliance New Energy Solar Ltd, a subsidiary of Mukesh Ambani-led Reliance Industries Ltd (RIL) and Adani Infrastructure — for incentives under the PLI scheme. At the time, the government had said that it will bring more bidders under the purview of the scheme once the budget allocation for the scheme is increased. Initially, the financial outlay of the solar manufacturing PLI scheme was Rs 4,500 crore. While presenting Budget 2022-23 last month, Finance Minister Nirmala Sitharaman said that it will be hiked by an additional Rs 19,500 crore.

Coal India, L&T, ReNew Solar, Acme Solar and Vikram Solar were some of the other bidders who had failed to make it to the shortlist during the initial round of auction.

Backdrop

India currently has a manufacturing capacity of 3 GW for solar cells and 15 GW for solar modules. The manufacturing of solar modules involves four stages — polysilicon, ingot, wafer, and cells, which are assembled into modules. India does not have any manufacturing capacity for polysilicon, ingot and wafer and is heavily dependent on China for imports. Through the Rs 24,000-crore PLI scheme, the government plans to augment local manufacturing for solar modules.

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