Some Indian manufacturers have been using imported so-called 'blue wafers' to make solar cells in India. These semi-processed cells, which require little value addition are counter-productive to the purpose of encouraging domestic manufacturing industry to scale up, according to MNRE. The ministry has hence cautioned manufacturers from using these for solar cells for its PV projects.
- MNRE has clarified it won’t allow the use of imported blue wafers for PV cells to be used for its programs where domestically manufactured PV cells and modules are required
- Instead, it wants manufacturers to use undiffused silicon wafer or black wafer to produce solar cells in India with every step of the way being truly local
- This condition will also apply to manufacturing-linked PPA tenders being launched by the SECI
- Such steps, states MNRE, will help establish a strong solar manufacturing base in India
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For some of its flagship programs, the Government of India has made it mandatory for developers to use domestically manufactured solar cells, such as Kisan Urja Suraksha Evam Utthan Mahabhiyan (KUSUM) with 25.75 GW target and 12 GW under CPSU Scheme Phase-II.
Since the country doesn’t have a full-fledged and established vertically integrated domestic PV manufacturing capacity, the Indian Ministry of New and Renewable Energy (MNRE) points out that some manufacturers have been importing semi-processed solar cells, called blue wafers, and turn them into complete cells with little value addition in India.
For this reason, it has now clarified that if this doped silicon wafer or blue wafer is imported and used as raw material for manufacturing of solar cells in India, these will not qualify as domestically manufactured for MNRE’s schemes and programs.
It now defines a solar cell as domestically manufactured when it is produced within India using undiffused or non-doped silicon wafers, referred to as black wafer and classifiable under Customs Tariff Head 3818. MNRE specifies that all steps/processes required for manufacturing solar PV cell from un-doped silicon wafers have been carried out in India.
Undiffused silicon wafers will also need to be used to manufacture solar cells for manufacturing facilities required to be set up under the Solar Energy Corporation of India’s (SECI) manufacturing-linked PPA initiative. However, the first such tender issued by SECI has been through several changes without exciting market interest; for the last one the solar power capacity was increased from 6 GW to 7 GW linked with 2 GW of manufacturing plant capacity (see India: Draft Guidelines For Hybrid Wind PV Projects).
The ministry believes this step will help in establishing a strong solar manufacturing base in India.
According to Mercom India Research, post the imposition of safeguard duty on imported solar PV cells and modules in the country in July 2018 Indian modules have become cost-competitive, rooftop project developers and EPC companies told the renewable energy market intelligence firm; moreover, the lead time for small scale projects was reduced.
“While it is good to hear that local manufacturers are doing better since the imposition of the safeguard duty, it is concerning that the domestic manufacturing industry is heavily dependent on and expanding based solely on duties, which is very risky,” said Raj Prabhu CEO of Mercom Capital Group. Adding, “Conducive rooftop solar policies by the government will also help domestic manufacturers as installers find it more convenient to procure modules locally.”