$3.1 Billion For India’s PV Industry

India is planning to come out with a $3.1 billion package to the domestic solar manufacturing industry. It is aimed at helping the industry thrive and at the same time create an export industry. The government has been planning such a policy for quite some time now.

It is being prepared by the Ministry of New and Renewable Energy (MNRE) and the Ministry of Commerce and Industry as well as government backed think-tank the National Institution for Transforming India (Niti) Aayog. Once ready, the Ministry of Finance will check the outcome, before it is supposed to be approved by the Indian cabinet.

A Bloomberg report attributed the news to unidentified official sources who said the proposed policy is called Prayas or Pradhan Mantri Yojna for Augmenting Solar Manufacturing. It will be part of the ‘Make in India’ campaign, which is a brainchild of the Indian Premier Narendra Modi. The intention is to have 5 GW of PV manufacturing as of 2019 and build 20 GW of projects by 2026, according to the report.

As per the last reported government statistics, on April 1, 2016, the country had 1.2 GW of manufacturing capacity for cells and 5.6 GW for modules (see India PV Manufacturing Capacity).

With the proposed policy in place, ‘multiple tenders of a few hundred MW each would be issued for the manufacture of everything from wafers to modules’. The government is contemplating offering 9 million INR (around $135,000) per MW for manufacturing tenders and 5 million INR (around $75,000) per MW for local deployment.

Several Indian and international companies have been considering to setting up manufacturing capacities in India. The most advanced is Adani Group of India, which is building a manufacturing facility in Gujarat, the first 1,000 MW phase of which is set to come online by the end of 2016. Japanese telecommunications firm SoftBank is also mulling setting up a manufacturing unit in India.

However, Bloomberg New Energy Finance (BNEF) points out that the government needs to offer well planned manufacturing-hub logistics for companies to feel excited enough to set up their facilities here.

For Phase-II of its 100 GW Jawaharlal Nehru National Solar Mission (JNNSM), India had started including a domestic content requirement (DCR) for some solar power projects. This made it mandatory for solar power project developers to use domestically manufactured solar cells and modules in their projects. Alleging unfair treatment to foreign developers,the US dragged India to the World Trade Organization (WTO) in the matter. The latter in September 2016 decided in favor of the US (see Final WTO Verdict In India-US Solar Dispute), which means that DCR should be eliminated for Phase-III, which will start in FY2017.