‘No flow’ of incentives to Indian solar manufacturers

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The delays echo problems with the preceding incentive known as SIPS. Credit: Lanco Infratech

Subsidies for Indian cell and module manufacturers are being hampered by delays, as shown by data from the Department for Electronics and Information Technology (MEIT).

A total of seven companies that have applied for an incentive for electronics manufacturers, known as the Modified Special Incentive Package Scheme (M-SIPS), were still waiting for approval as of September last year, with some having applied a full year earlier.

Jasmeet Khurana, associate director, consulting at Bridge to India, told PV Tech: “The key message is that a lot of people have been talking about setting up manufacturing in India, but only a very few of them have actually gone ahead and submitted applications to government for incentives under the existing policy and within that the sanctions are often fairly delayed – not just for solar but just M-SIPS programme overall.”

The M-SIPS scheme offers a 20-25% capital subsidy for units engaged in electronics manufacturing. For high capital investment projects like fabs, it also provides for reimbursement of central taxes and duties.

MEIT data showed M-SIPS applications from PV manufacturers. It is likely that come companies have put in separate applications for cells and modules as they have different subsidies, said Khurana:

Company name Date of application Planned capacity of cells/Modules (MW)
Mundra Solar Sep 2015 1,000
Mundra Solar Sep 2015 2,000
Saatvik Green Energy Dec 2015 115
Premier Solar Systems Dec 2015 200
Bharat Heavy Electricals Mar 2016 20
Bharat Heavy Electricals Mar 2016 105
Jupiter International Apr 2016 214
Sahaj Solar June 2016 150
Vikram Solar July 2016 400

The delays echo problems with the preceding incentive known as SIPS, which only applied to solar cells, not modules. Many manufacturers that applied for SIPS 6-8 years ago before setting up facilities have still not received any incentive due to disputes and other issues, despite these subsidies being sanctioned, added Khurana.

While some of the M-SIPs incentives may have now come through – given the ministry data is as of September 2016 – Khurana said: “There has been no flow of money.”

India's domestic PV manufacturing industry faces an uphill struggle with the influx of extremely cheap equipment imports from China, driven by weakened demand from within China, and the loss of the World Trade Organisation (WTO) dispute with the US over India's local content requirment policy.

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