India needs $7.2 billion to promote integrated solar module manufacturing: CEEW-CEF Report

Highlights :

The Union Government has already announced multiple measures over FY 2021-22, including allocating USD 3.2 billion (Rs 24,000 crores) to promote domestic solar manufacturing.

The CEEW Centre for Energy Finance (CEEW-CEF) said in a report on May 12 that India needs USD 7.2 billion in investments in the next three to four years to boost integrated solar module production.

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Released yesterday, the report added further that the push to improve local manufacturing could help domestic module manufacturers clock $30 billion (Rs 2.3 lakh crore) in revenues by 2030 from selling 150 GW at Rs 15/Wp (Watt peak) and generate employment opportunity for around 41,000 workers. It reads, “India’s push to indigenise the solar manufacturing value chain would require capex investments worth $7.2 billion (Rs 53,773 crore) over the next three to four years,”.

Rishabh Jain, Programme Lead at CEEW, has been quoted by a media house as saying that solar energy is the cornerstone of India’s goal to establish 500 GW of non-fossil-based capacity by 2030 and long-term net-zero ambition. He noted that the ongoing geopolitical and energy crises point toward the importance of reducing import reliance and developing a reliable and robust domestic supply chain for industries critical to the energy transition.

To promote domestic solar manufacturing, the government has already announced multiple measures over FY 2021-22, including allocating USD 3.2 billion (Rs 24,000 crores) through the production-linked incentives scheme and levying a basic customs duty of 25 percent and 40 percent on all imports of solar cells and modules, respectively. The first part of the PLI scheme for Rs 4500 crores had seen a strong response and the eventual selection of players who will potentially add 10 GW of  manufacturing capacity.

Besides the PLI scheme, multiple firms have announced or are in the process of expanding or setting up fresh capacities. The entry of major groups such as Reliance and Adani has already ensured that large capacities are set to dominate in the coming years, instead of the tens of sub 250 mw capacity players till now.

Power and MNRE minister R.K. Singh has already had a formal round of discussions with industry stakeholders on the issue , to try and arrive at a balanced approach in the PLI scheme.

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