India’s Ministry of New and Renewable Energy (MNRE) has clarified that solar cells manufactured using imported diffused silicon wafer (generally called ‘blue wafer’) shall not qualify as domestically manufactured for getting benefits under government schemes.
Notably, a number of MNRE’s flagship schemes such as Kisan Urja Suraksha Evam Utthan Mahaabhiyan (KUSUM) mandate use of domestically manufactured solar PV cells. However, it was seen that some manufacturers have been importing semi-processed solar PV cells (generally called ‘blue wafer’) and making final solar PV cells with little value addition in India.
“A solar PV cell shall be considered to be domestically manufactured only if the same has been manufactured in India using undiffused silicon wafer (generally called ‘black wafer’)”—read the MNRE order.
“A solar PV cell domestically manufactured in India—using undiffused silicon wafer—shall be classifiable under Customs Tariff Head 3818, provided all steps and processes required for manufacturing the cell from the undiffused silicon wafer have been carried out in India.”
“If diffused silicon wafer (blue wafer) is imported and the same is used as raw material for the manufacture of solar PV cells in India, such solar PV cells shall not qualify as domestically manufactured solar PV cells, for the purpose of MNRE’s Schemes/Programmes mandating use of domestically manufactured solar PV cells”—added MNRE.
The ruling will be applicable to the schemes/programmes being implemented by the MNRE, wherein it is mandatory to use domestically manufactured solar cells and modules, and also to the manufacturing-linked PPA initiative by Solar Energy Corporation of India Ltd.
The decision is likely to boost upstream manufacturing in India. Currently, the country has negligible polysilicon, wafer and cell production facilities to support its domestic content requirements.
While PV power installations have succeeded beyond expectations due to record low tariffs, the PV manufacturing is yet to attain critical mass in India.
“The country possesses almost 11 GW of domestic solar module production capacity (consisting of nearly 175 companies) and around 3 GW of cell output (consisting of 18 companies) annually. With a national goal of 100 GW of solar generation capacity by 2022, the creation of a domestic manufacturing base is of critical significance for the country which currently imports almost 85% of the 10 GW of PV equipment it consumes annually,” according to a report by thinktank The Energy and Resources Institute.