India has set a ‘280 GW by 2030’ solar target, out of which 240 GW is yet to be implemented. India Ratings estimates the PLI scheme shall provide incentives to the beneficiary facilities for an aggregate sales of 20-30 GW over a five-year period, which is just 8%-13% of the planned 240 GW requirement.
Solar manufacturers have welcomed the bidding criteria which apply to the incentives offered for setting up gigawatt scale, high-efficiency PV production lines but would like a bigger budget, to finance significant capacity build-up.
India’s declining solar tariff trend will see a reversal as the basic customs duty comes into effect. According to India Ratings, tariffs will likely touch INR 2.43 when using imported solar modules with 40% duty applicable, putting an additional cost burden on Discoms.
A new report says the imposition of safeguard duties and basic custom duties is only a partial solution to help the domestically produced solar modules remain competitive with imported panels. The government needs to adopt a long-term strategy towards PV manufacturing that supports backward integration and sustained innovation.
An ambitious, INR146,000 crore, five-year expansion of a previous domestic industry spending program includes money to attract investment into the sustainable energy and transport technologies.
Solar projects under construction face uncertainty as factors like labour shortage and proposed duties on module imports could lead to significant cost overruns for the developers.
Delay in sourcing of PV modules from China can cause project cost and time overruns, inviting penalties for missing the commissioning date.
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