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Renewable Energy Ministry proposes to provide big push for solar manufacturing

V Rishi Kumar Hyderabad | Updated on January 09, 2018 Published on December 16, 2017
MNRE's proposal for subsidies and incentives include more than ₹11,000 crore for manufacturers to expand and upgrade

Subsidy proposals include 30 per cent financial assistance, duty exemption and low interest rates

The Ministry of New and Renewable Energy has released a concept note of a proposal to build out India’s manufacturing supply chain covering polysilicon, wafers/ingots, cells and modules to accelerate the growth of the country's solar photo-voltiac sector.

MNRE is proposing a slew of subsidies and incentives including direct financial support of more than ₹11,000 crore for manufacturers to expand and upgrade, a 12 GW Central Public Sector Undertaking (CPSU) domestic content requirement (DCR) programme to create robust domestic demand, an increasing DCR requirement from modules to polysilicon, 30 percent central financial assistance, cheaper loans, a custom duty exemption and cheaper power.

The concept note is open to comments and suggestions until December 31, 2017. The programme aims to strengthen the Make in India campaign, reduce the country’s dependence on foreign manufacturers, and make domestic manufacturers competitive with their international counterparts.

Indian solar installations have risen from just 6 MW in 2009 to a cumulative total of approximately 20 GW to date, with another 9.5 -10 GW of installations expected this year alone, according to the Mercom India Q3 Market Update.

The Government is planning a three-pronged approach to support local manufacturers that includes: providing a level playing field with the imposition of anti-dumping duty on cells and modules, creating demand through a DCR program, and supporting manufacturers financially by providing multiple subsidies outlined in this policy proposal.

To ensure a guaranteed market, the policy proposes a 12,000 MW CPSU (this is higher than the earlier proposed 7.5 GWs) programme that would have to comply with World Trade Organization (WTO) rules.

If these incentives are seriously implemented and there is clear visibility for the next five years of market demand, then more manufacturers from China and other countries may decide to establish manufacturing units in India.

The MNRE is preparing to announce a spate of tenders for solar projects in the coming four months, starting in December 2017. Under the plan, the MNRE expects to work alongside states to announce the tenders needed to reach 20 GW of ground-mounted capacity in solar parks in the 2017-18 fiscal year.

Another 30 GW is expected to be tendered in 2018-19 with 30 GW to follow in 2019-20.

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Published on December 16, 2017
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