Cabinet Okays Rs 4,500 Cr PLI Scheme for PV Modules; Domestic Manufacturers Celebrate

The Cabinet has approved MNRE's proposal for the implementation of Production Linked Incentive (PLI) Scheme under ‘National Programme on High-Efficiency Solar PV (Photo Voltic) Modules’ for achieving manufacturing capacity of Giga Watt (GW) scale in high-efficiency solar PV modules with an outlay of Rs 4,500 crore.

April 08, 2021. By Manu Tayal

The Cabinet has approved the Ministry of New & Renewable Energy’s (MNRE) proposal for the implementation of Production Linked Incentive (PLI) Scheme under ‘National Programme on High Efficiency Solar PV (Photo Voltic) Modules’ for achieving manufacturing capacity of Giga Watt (GW) scale in high efficiency solar PV modules with an outlay of Rs 4,500 crore.

Solar capacity addition presently depends largely upon imported solar PV cells and modules as the domestic manufacturing industry has limited operational capacities of solar PV cells and modules.

The government’s move is expected to reduce import dependence in a strategic sector like electricity, and also to support the ‘Atmanirbhar Bharat’ initiative.

MNRE said that, solar PV manufacturers will be selected through a transparent competitive bidding process, and the PLI will be disbursed for 5 years post commissioning of solar PV manufacturing plants, on sales of high efficiency solar PV modules.

Moreover, manufacturers will be rewarded for higher efficiencies of solar PV modules and also for sourcing their material from the domestic market. Thus, the PLI amount will increase with increased module efficiency and increased local value addition.

Through this scheme the government is targeted for additional 10 GW capacity of integrated solar PV manufacturing plants, and to attract direct investment of around Rs 17,200 crore for such plants.

Besides, this initiative is expected to create demand of Rs 17,500 crore over 5 years for 'Balance of Materials', and will provide direct employment of about 30,000 and indirect employment of about 1,20,000 persons.

Moreover, the scheme is likely to help in import substitution of around Rs 17,500 crore every year, and provide impetus to Research & Development (R&D) to achieve higher efficiency in solar PV modules.

Welcoming the government’s move, Dr Hitesh Doshi, Chairman and Managing Director of Waaree Group, in a quick reaction said, “By diverting demand to India, the domestic manufacturers will get the much-needed confidence to invest in expanding capacity. It will make the sector more operational and accessible to foreign players and enable solar manufacturers to help government achieve its clean energy targets.”

He also mentioned that, “although a concentrated PLI scheme of INR 6,238 crore can incentivize manufacturers, the solar sector requires additional investment to create an ecosystem that encompasses the complete demand-supply value chain.”  

Agreeing with Dr Hitesh Doshi, Gyanesh Chaudhary, MD of Vikram Solar, said “with this decisive step towards creating a self-sustaining ecosystem for solar equipment manufacturing in India, we are confident that India is well-poised to become the manufacturing hub for renewable energy technologies.

At Vikram Solar, we are confident of capitalizing on the new opportunities with our state-of-art technologies, manufacturing prowess and diversified product portfolio. The PLI scheme will aid our growth and unwavering resolve in shaping the solar revolution. Vikram solar will remain at the forefront of partnering with the government in building the new, energy rich, and self-reliant India.”

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