As on date, there are no wafer makers in India, while the cell manufacturing capacity is only 2.5 giga-watt (GW), implying that the 10GW of domestic solar module makers have to import most of their components from outside.
To reduce the country’s solar equipment import dependency, the ministry of new and renewable energy (MNRE) is planning to launch an interest subvention scheme for loans of cell and wafer manufacturers, officials said on Tuesday. Wafers and cells are the basic building blocks of solar modules, and the minuscule manufacturing base of these products is the cause of continued reliance on imports.
As on date, there are no wafer makers in India, while the cell manufacturing capacity is only 2.5 giga-watt (GW), implying that the 10GW of domestic solar module makers have to import most of their components from outside.
In a virtual symposium titled ‘India PV EDGE 2020’ held on Tuesday, MNRE officials said under the proposed scheme, discounts on interest would be given to wafer and cell manufacturers on capital expenditure and working capital requirements. The percentage of interest subvention was not mentioned. Through this scheme, manufacturers would also receive interest subvention on loans taken for technological upgrade of their plants after three years of operation. Plans are underway to offset the cost of power for wafer manufacturing as well.
Union power minister RK Singh said, “We will also include additional incentives for firms who use advanced technologies under the interest subvention scheme.”
Niti Aayog, on its part, has also proposed a production-linked incentive scheme for exports of solar modules from India, where solar module makers will be incentivised according to the efficiency of the panels. China continues to be the largest source of solar cells and panels for India, with imports worth $1.3 billion in FY20. The value of such imports from China in FY18 was a massive $3.4 billion. The share of prominent Chinese module suppliers such as Trina, Hanwha, JA Solar and Canadian Solar (which has a large production base in China) in the Indian market has significantly dropped in this period.
To reduce Chinese imports, the Union government had imposed a 25% safeguard duty in July 2018 for two years (it has just been extended for another year to July 2021, at a rate of 15%). The government is also considering to impose a 20% basic customs duty on solar imports; a final call on this is yet to be taken. Solar project developers prefer Chinese equipment due to lower prices. Global module prices are consistently coming down and currently ranging at $0.17/watt power (wp) — almost half the early 2018-levels.
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