Finance Minister Nirmala Sitharaman proposed a two-pronged approach to promote local manufacturing of solar panels to give a boost to clean-tech and renewable energy.

The Minister proposed an additional allocation of ₹19,500 crore under the Production Linked Incentive (PLI) scheme to boost solar panel (also called solar module) manufacturing in the country.

“To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of ₹19,500 crore for PLI for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made,” Sitharaman said in her speech.

Duty raised on solar cells, modules

The increase in allocation comes simultaneously as the Finance Ministry proposed to raise customs duty on solar cells and solar modules. Custom duty on solar cells has been proposed to be raised to 25 per cent from 20 per cent while that on solar modules to 40 per cent from 20 per cent.

Solar capacity addition presently depends largely upon imported solar PV cells and modules as the domestic manufacturing industry has limited operational annual capacities of around 2,500 MW for solar PV cells and 9,000-10,000 MW for solar PV modules.

Sumant Sinha, Chairman and CEO, ReNew Power said, “The additional outlay of ₹19,500 crore for solar (panel) manufacturing will help the renewable industry expand rapidly. We expect IREDA, which has been capitalized recently, to move fast and issue letters of award to companies that have bid under the PLI scheme.”

To enable credit

Sitharaman also proposed the inclusion of Energy Storage Systems including dense charging infrastructure and grid-scale battery systems in the harmonized list of infrastructure. This is aimed at allowing the sector to avail credit facility for digital infrastructure and clean energy storage.

“The inclusion of grid storage and dense charging into the harmonised list of infrastructure will help mobility start-ups and IPPs to explore low-cost financing,” Sinha added.

Energy storage systems technology, including battery energy storage systems (BESS), pumped hydro energy storage (PHES) or other technologies like green hydrogen or green ammonia storage will be essential in order to integrate large volumes of renewable energy.

Last year the state-run NTPC announced its intention to set up 1,000MWh of grid-scale BESS across multiple NTPC power plants in India. For this it has invited companies to set up these systems. JSW Energy is investing in PHES in a number of projects across seven states.

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