• The Ministry of New and Renewable Energy will soon float a tender for 500 MW capacity mandating the use of locally made modules
  • Current format of some PV projects under the domestic content category require using locally made solar cells and modules, now government wants separate auctions which will make it compulsory to use only domestically manufactured modules
  • To receive a 30% subsidy for rooftop solar PV installations, locally produced modules are to be made compulsory

India will now hold separate auctions for solar PV projects mandating the use of domestically manufactured modules. This can be seen as another effort from the government to support local producers of solar modules.

Speaking to local business daily, The Economic Times (ET), Joint Secretary in the Ministry of New and Renewable Energy (MNRE), Tarun Kapoor, confirmed that a tender for 500 MW capacity with mandatory requirement of using locally produced modules will be announced soon. The government is hoping that such projects will help Indian solar module manufacturers that are forced to compete against Chinese modules that are ‘8-10% cheaper due to economies of scale and technologically superior,’ according to the article.

The Indian government is also working on bringing out a manufacturing policy soon (see Indian PV Manufacturers).

India is currently embroiled in a legal battle with the US, which dragged the sub-continent to the World Trade Organisation (WTO) for its Domestic Content Requirement (DCR) category in its solar auctions. Nevertheless, Kapoor was quoted by ET as saying, “The domestic content requirement component in our solar program will remain.”

The current format of solar power capacity auctions in the country allows for capacities to be built under the ‘open category’ or ‘DCR category’. The open category projects has attracted more foreign developers, while the DCR category mandating the use of locally made solar cells and modules has see a much smaller response.

According to ET, MNRE is also eliminating the obligation to use domestic cells for some projects. This would help local module manufacturers, which can now use cells from China, which are cheaper and are available in large quantities with higher efficiencies.
India’s current PV manufacturing capacity for cells is 1,212 MW and for modules it is 5,620 MW, as of April 1, 2016 (see India PV Manufacturing Capacity). This is not enough for the country’s ambitious plan to have 100 GW of installed solar power capacity by 2022. However, several manufacturing projects are in the planning, the most advanced is a cell and module factory from Adani (see Adani PV Production In India).

According to the report, the MNRE provides 30% subsidy for rooftop solar installations on residential buildings, schools and hospitals. Now, the ministry will only offer subsidy to those who use locally manufactured modules.