Indian government plans support program for domestic solar manufacturing

Indian government plans support program for domestic solar manufacturing

India’s Ministry of New and Renewable Energy wants to support domestic manufacturing of solar cells and modules. For this, a special program has been developed, the second phase of which has now commenced.

In order to support domestic solar manufacturing, the Indian Ministry of New and Renewable Energy (MNRE) has developed a Central Public Sector undertaking (CPSU) – a special program designed to bring this goal forward. It will help support the installation of 7.5 GW of solar capacity using only Indian-made parts.


Various strategies shall pave the road to success

The MNRE has developed a straightforward plan that is intended to help pushing domestically manufactured solar components and put them in a competitive position against foreign competitors, which are usually cheaper. It is based around a cost analysis that is intended to show the cause of the price differences and, hopefully, present possible solutions.

One approach is to create a need. In order to do so, the MNRE intends to ringfence new solar projects of a capacity of 7.5 GW to the use of domestically manufactured components only. At the time being, this strategy is under proposal.

Furthermore, it is believed that the currently low demand for Indian solar components is partly based on a lack of fully vertically integrated, state-of-the-art solar PV manufacturing facilities in India. In an attempt to catch up, their creation of these is to be incentivised by the MNRE.


An ambitious vision and important challenge

On the long run, the MNRE’s idea is to make India’s solar industry globally competitive and a great factor for the country’s energy security. During the process, the solar production chain will be studied, as well as the optimum scale of operation and the overall cost structure of the aforementioned production facilities.

Recently, times have not been easy for the Indian government and, after a recent anti-dumping case and breaking with the World Trade Organization’s (WTO) rules during the introduction of a Domestic Content Requirement (DCR), the pressure to perform is ever-growing.

During phase 1 of the program, the MNRE has just allocated 1 GW of solar capacity. Almost half of this has already been commissioned. Whether or not phase 2 will be more successful remains to be seen.


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