Boosting Solar Equipment Manufacturing in India

Current Challenges faced by Domestic Solar Manufacturer in India needs attention

Government Measures to
boost Domestic Solar 1 Solar modules account for about 60% of the total project expenditure in solar plants. With
Manufacturing in India domestic manufacturing solar tariff will rise. Domestic modules are currently priced in
Higher the range of 29-30 cents per watt-peak (c/wp), modules imported from China come for
1. Imposition of Basic custom Solar Tariffs 23-24 c/wp. With commodity prices rising along with implementation of BCD solar tariff
duty (BCD) of 25% on Solar
will rise by 20% approx.
Cells and 40% on Solar
Modules to take effect from
2 With end of safeguard duty in July 2021 and implementation of BCD from April 2022;
April 2022
there is no protective measures for upcoming 9 months against the dumping of cheaper
2. PLI Scheme for Solar Panel Absence of
solar cell and solar modules by Chinese manufacturer. This will lead to significant
Manufacturing of Rs. 4500 Duty Barriers
shutdown of units in India and risk for solar jobs
Crore
3. Sourcing of solar equipment 3 While the current demand is of 30 GW per year, domestic manufacturers can supply only
from entities that are a part 2.5 GW of solar cells and 10 GW of modules as per current installed capacity. On other
of the approved list of
Demand hand the price of pure metallurgical silicon that is mainly imported from China rose by
models and manufacturers Supply 35%. In between the demand supply gap will force solar module manufacturer to rely on
(ALMM) Mismatch expensive imports to meet their contractual obligations for setting up the projects in hand
4. Bringing in Bureau of Indian
4 Goods and services from SEZs, when offered to entities in the domestic tariff area, are
Standards (BIS) certification
for solar products Issues with considered as imports and are thus subject to customs duty. Currently, 63 per cent of
Solar SEZ India’s solar cell manufacturing units and 43 per cent of solar panel manufacturing units
5. Making must-run statuses are situated in SEZs. Thus, the imposition of BCD will, therefore, make the products
for renewable energy units Zones
manufactured in the SEZs expensive
mandatory

Govt has implemented slew of measures to boost Solar Manufacturing in India to improve the cost competitiveness of domestic
PV module manufactures against the imported module by more than 10% at the prevailing imported module prices under the
assumption of backward integration through manufacturing of solar cells and polysilicon
Abhinav Sengupta | MBA in Energy & Infrastructure & B.Tech in Mining & Executive Diploma in Business Valuation | Email : abhinavsengupta85@gmail.com | Phone : +919016047552