India aims high in solar manufacturing

India is aiming to emerge as a global supplier of solar panels and related products, apart from meeting domestic demands.

The government wants to boost domestic manufacturing through a production-linked incentive (PLI) scheme that offers total benefits of Rs1.97 trillion to manufacturers in 10 sectors, including that of high-efficiency solar modules, according to a note from the Ministry of New and Renewable Energy.

The government has made an outlay of Rs4,500 crore to push the manufacturing of solar modules, said the ministry. India has been depending heavily on China for solar panels. Now that government is planning to slap higher dories on imports of panels and cells in order to support the local products and manufacturers.

In March, the government decided to impose a 40 per cent basic customs duty on solar modules and 25 per cent on solar cells from 1 April 2022, which would certainly make imports costlier and encourage local manufacturing. At present, only a 15 per cent safeguard duty is imposed on imports from China and Malaysia.

India is running the world’s largest clean energy programme to achieve 175 gigawatts (GW) of renewable capacity, including 100GW of solar power by next year. According to the Central Electricity Authority by 2030, the country’s power requirement would be 817GW, more than half of which would be clean energy; of this, 280GW would be from solar energy alone. To achieve the target of 280GW, around 25GW of solar energy capacity is needed to be installed every year till 2030.

As the government is pushing the local manufacturing of solar panels, some of the Indian companies have begun looking for ways to expand the business.

At least two manufacturers, Vikram Solar and Waaree Energies, have hired investment banks for initial public offerings (IPO) to raise Rs1,500 crores each, it is reported.

Kolkata-based Vikram Solar has a photovoltaic module manufacturing capacity of 2.5GW, while Gujarat-based Waaree has a capacity of 2GW. Both firms also offer engineering, procurement and construction services to build solar projects.

The ministry said that its national programme on high-efficiency solar modules will create 30,000 direct and 1.2 lakh indirect jobs.