India Clears Tranche II Of Solar PV PLI Scheme

• The Indian cabinet has approved INR 195 billion to support local solar PV manufacturing efforts under tranche II of the solar PLI scheme
• Companies will be selected through a transparent selection process and PLI disbursed over a 5-year duration post commissioning of the plant
• Maximum budget has been reserved for fully integrated manufacturing plants, followed by silicon free facilities and cell+module integrated fabs

The Indian Prime Minister Narendra Modi led cabinet has given its seal of approval to increasing the budget of the Production Linked Incentive (PLI) scheme with INR 195 billion ($2.42 billion) under tranche II to support the development of about 65 GW per annum integrated solar PV manufacturing in the country.

The government will disburse PLI on National Programme On High Efficiency Solar PV Modules to the winners, to be selected through a transparent selection process. It added that the PLI will be disbursed for 5 years post commissioning of solar PV manufacturing plants, and sales of high efficiency solar PV modules from the domestic market will be incentivized.

Post the cabinet approval, addressing local journalists in a press conference, Ministry of New and Renewable Energy (MNRE) Secretary Indu Shekhar Chaturvedi explained that the government expects this INR 195 billion to support:

• 29 GW of fully integrated manufacturing plants, i.e. polysilicon-wafers-cells-modules for INR 120 billion ($1.49 billion) budget
• 18 GW of plants integrated from wafers to modules for INR 45 billion ($557 million) budget, and
• 18 GW of plants for integration across cells and modules for INR 30 billion ($372 million) budget.

The support will also bring in direct investment of around INR 940 billion, while creating about 1,95,000 direct and 7,80,000 indirect jobs. India will be able to substitute close to INR 1.37 trillion ($17 billion) in solar imports. It will also boost R&D activities to achieve higher efficiencies for solar modules.

"The National Programme on High Efficiency Solar PV Modules aims to build an ecosystem for manufacturing of high efficiency solar PV modules in India, and thus reduce import dependence in the area of Renewable Energy. It will strengthen the Atmanirbhar Bharat (self-reliant India) initiative and generate employment," stated the government.

Tranche I of the scheme had a budget of INR 45 billion. Through a competitive round, India selected Jindal India Solar Energy Limited, Shirdi Sai Electricals Limited (SSE) and Reliance New Energy Solar Limited (RNESL) to distribute the entire budget (see Solar PLI Budget Set To Increase).

However, it had received interest from 13 other contenders including US based First Solar along with the 3 winners offering a total manufacturing capacity of 54.5 GW. Following this, the government increased solar PLI budget with an additional INR 195 billion under FY 2022-23 budget (see Energy Transition On India's Agenda In Budget).

Chaturvedi also added that with the government bringing in Basic Customs Duty (BCD) on imported cells and modules from April 1,2 022, Indian module manufacturing capacity has doubled from 10 GW to 20 GW, and cell capacity from 3 GW to 4.5 GW.

He counted that India would need 30 GW to 35 GW of annual module supply to meet the goal of 280 GW to 300 GW of installed solar PV capacity by 2030 as part of the 500 GW non-fossil fuel installed capacity goal. With tranche I adding 8.7 GW and tranche II expected to add 65 GW, India should be looking at around 74 GW of domestic solar manufacturing capacity, not counting the ones coming up without PLI support. It will make India self-sufficient for domestic use as well as provide enough to be exported.