India to support integrated PV manufacturing plants through PLI scheme

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
India is aiming for 280GW of installed solar by 2030. Image: ReNew Power.

Solar manufacturers that plan on setting up integrated, higher capacity plants in India will be given preference in the country’s new production-linked incentive (PLI) programme.

The Ministry of New and Renewable Energy (MNRE) yesterday (Thursday 29 April 2021) released guidelines for the scheme, which forms part of government efforts to reduce the country’s reliance on foreign solar imports by supporting domestic manufacturers.

Some INR45 billion (US$603 million) will be allocated over five years to back the domestic development of high-efficiency PV modules, with preference given to manufacturers that plan on setting up fully integrated solar PV manufacturing plants using silicon-based technology, fully integrated thin-film technology or “any other technology”. MNRE said technologies that result in better module performance will be incentivised.

Applicant manufacturers will have to set up a plant with a minimum capacity of 1GW, while the maximum capacity that can be awarded to one recipient is 50% of their bid capacity or 2GW, whichever is less. PLIs will be given on the production and sales of high-efficiency modules by the selected units.

Modules produced by the PLI beneficiaries must have a minimum efficiency of 19.5% with temperature coefficient of Pmax better than -0.30%/°C, or an efficiency of 20% with temperature coefficient of Pmax equal to or better than -0.4%/°C.

The requirements also stipulate that plants featuring imported capital goods for setting up the module manufacturing facility before the last date of bid submission will not be eligible for participation, with manufacturers encouraged to source their material from the domestic market.

Vinay Rustagi, managing director at consultancy Bridge to India, raised concerns about the complexity of the scheme’s design and warned that the subsidies awarded to winning bidders could be too low. “We will get more information in the tender documents, but we believe that actual subsidy pay out could be less than 10% of revenues, in which case, most bidders would be wary of participating under this framework,” he said.

Initially approved in November, the PLI scheme forms part of Indian government efforts to reach 280GW of installed solar by 2030, meaning around 25GW will have to be deployed each year until then.

According to MNRE, India’s domestic manufacturing industry has annual capacities of 9GW – 10GW for PV modules and around 2.5GW for cells, meaning solar deployment in the country currently depends largely on imported equipment.

Other government efforts to boost domestic solar manufacturing have seen the introduction of a 20% levy on inverters and a safeguard duty on modules and cells that will expire in July. As of April 2022, a 40% basic customs duty on both modules and cells will come into effect, with project developers expected to ramp up efforts to commission solar projects before then.

Article updated to include comment from Bridge to India.

Read Next

May 11, 2021
Spain’s Solarpack was affected by pandemic-related project delays in Chile during a first quarter, in which it saw its net profit shrink 95% year-on-year to €300,000.
May 11, 2021
Europe’s solar technology specialists may need up to €7 billion (US$8.51 billion) in capital investment in order to scale up domestic manufacturing to be globally competitive, according to a panel of industry leaders.
May 5, 2021
SHV Energy, a Netherlands-based liquified petroleum gas (LPG) distributor, has acquired a majority stake in Indian solar developer SunSource Energy.
April 8, 2021
The Indian government has approved production-lined incentives for the country’s solar module manufacturing sector to help the country add an extra 10GW of solar power generation capacity over the next five years.
PV Tech Premium
April 8, 2021
After a challenging year, India’s solar sector stands primed for something of a rebound. But a host of familiar issues, from the perilous state of DISCOMs to regulatory uncertainty, run the risk of stymying future growth. Vinay Rustagi, managing director at consultancy Bridge to India, talks to PV Tech about the future prospects for Indian solar.
April 8, 2021
Tata Power Solar has expanded its PV manufacturing facility in Bengaluru, India, taking the total production capacity of modules and cells to 1.1GW.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
May 11, 2021
Upcoming Webinars
May 26, 2021
Session 1 - 7:00 AM (BST) | Session 2 - 5:00 PM (BST)
Solar Media Events
June 15, 2021
Solar Media Events
July 6, 2021