The Indian solar manufacturing sector is hopeful of targeted initiatives and policies for scaling-up the domestic solar manufacturing aligned to the 450 GW renewables by 2030 target as the Union Budget for the upcoming financial year 2021-22 is scheduled to be presented on February 1.
There is an immediate need to build a robust eco-system for indigenous solar manufacturing and make it cost-competitive to achieve the Government’s vision of Aatmanirbhar Bharat (self-reliant India).
India needs a comprehensive policy framework encompassing both tariff and non-tariff barriers, long-term financial support and direct incentives to make the domestic solar industry cost-competitive.
The finance ministry should consider 5% interest subvention on term loan and working capital, upfront central financial assistance of 30% on CAPEX, and increase in the export incentive from 2% to 8% under Remission of Duties or Taxes on Export Product (RoDTEP), which will aid indigenous solar manufacturing.
The industry awaits the implementation of basic customs duty (BCD) with exemption to Special Economic Zone (SEZ) based solar manufacturers and the Production Linked Incentive (PLI) scheme.
Bringing down Minimum Alternate Tax (MAT) for units operating in SEZs, extending Section 10 AA of Income Tax Act till March 31, 2022 for SEZ-based solar manufacturing unit, preferred interest rate support and priority lending support for manufacturing units, availability of National Clean Energy Fund (NCEF) for expanding solar R&D are critical to augment domestic solar manufacturing.
Additionally, the Government should consider implementing tariff barriers like basic customs duty, safeguard duty, and anti-dumping duty for at least 4-5 years.
Offering a capital subsidy of 50% for setting up R&D and quality testing infrastructure within the manufacturing units will help build scale. Also, a 200% super-deduction for the R&D expenditure on new and clean solar technology development should be allowed.
India already offers a 200% super-deduction for the R&D expenditure in emerging areas such as biotechnology, which has led to the rapid growth of Indian biotech and pharma companies.
Implementing these policy recommendations will encourage economic recovery amidst the pandemic and provide an enabling eco-system to make India the global manufacturing hub for solar.
Vikram Solar is a solar energy solutions provider company, specialising in PV module manufacturing and EPC solutions.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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Expectations are well defined but very high. GOI is also keen on solar but may not be able to shell out as spelled out in the article. China’s level of subsidies, manufacturing capacities , volumes production, Quality, Cost competitiveness and extra-ordinary infrastructure set up are no way possible , I believe even if GOI decides to part with a large kitty for solar supply chain manufacturing in India, where the bent of mind is tuned to only copy paste type of development.
Lets be clear and truthful private entrepreneurs to the extent of our expectations and not burden the Govt to give, give & give only for Solar , since there are so many other priority segments which need high attention, being a developing country with millions starving even for basic amenities. I can convey my All the best , as a senior solar consultant and a big solar enthusiast.
Unfortunately…. The GOI with it’s Million+ Employees in unable to come up with a Nataional Energy Policy even after passing the Environmental Protecion Act in 1986… 34 years back… as the “cubby holes” in the Ministries are blindsided by their blinkers… unable to act synergistically together …. like Race Horses in a Race Course.
It is clear that 500GWe of RE by 2030… that has taken >10 Years already…. will be unable to have ANY MEANINGFUL IMPACT ON POLLUTION and at this rate DOOM the Nation to the “Killing Fields” of Pollution in India.
Giving subsidies do not solve problems…. guaranteeing manufacturers in India (no thanks China) sale of PV Panels (like PPA… Power Purchase Agreements with or without MSP) will provide a more effective “level playing field” and support financing of these Ingot-Cell-Panel Facilities. This will stop the massive drain of money to “Made In China” products that is then used to finance their military “excursions” in the Himalayas to fight Indian Jawans there protecting the Borders of India.
What India needs is a Comprehensive and Integrated Energy Policy (not for existing Electricity customers only) to align their efforts with the ROW (Rest of World) to achieve Zero (Manmade) Pollution by 2050… 30 years away.
500GWe every 10 years will simply not be adequate…
[ 500GWe of Solar Plants, producing 1200KWhrs/KW… are equal to only ~80-100GWe Nuclear/ Fossil Plants Operating at 7500-5000hrs/yr at rated Capacity respectively].
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