To promote manufacturing in India of solar photovoltaic cells and modules, the ministry of new and renewable energy (MNRE) has drafted a set of proposals for financial and other support. Direct financial support of Rs 11,000 crore is proposed.
"The objective is to eventually have the entire spectrum of manufacturing, from poly-silicon to modules," goes the draft, reviewed by Business Standard. Comments have been invited from the industry, after which the final scheme would follow.
Domestic solar manufacturing had been hit by cheaper import in earlier years. So, MNRE initiated a Domestic Content Requirement (DCR) under the National Solar Mission. A portion of projects offered for bidding was to be built through domestic content. This was challenged by the American government at the World Trade Organization, as breaching global rules. In the new policy, the ministry will revise the DCR.
Government procurement is proposed at 12,000 Mw, from the existing 1,000 Mw. A new quality order is proposed for solar cells and molecules, with infrastructure for quality testing. "Further, to encourage continuous improvement in quality, the DCR content requirement would be reviewed every year (and) the government may earmark a certain component, say 10 per cent, of the DCR, for cells of higher quality than the minimum quality prescribed. The percentage to be earmarked and the level of quality to be prescribed would be increased every year," states the proposal.
The plan proposes Central Financial Assistance in the form of a capital subsidy of 30 per cent for setting up or upgrading manufacturing capacity. The policy will target the creation of manufacturing capacity of 10 Gw (10,000 Mw) over five years, with focus on an integrated silica to modules package and intermediate standalone packages or combinations.
Where manufacturing capacity is set up without taking the capital subsidy, an interest subvention of three per cent is proposed, for loans taken through nationalised banks. This subvention will be available for the manufacture of polysilicon, wafers, and cells.
The central government would also offer exemption from customs duty on import of capital goods. With a manufacturing unit requiring high capital investment, the government would allow a solar power plant of twice the required capacity, to earn through power sale as well. However, any manufacturing plant availing of this would not be eligible for any other incentive, goes the draft.