PLI boost spurs solar manufacturers to look at new schemes for growth

The manufacturing ecosystem for the renewable energy sector has seen multiple changes to the import duty regime for solar cells and modules. But the fact that 85 per cent of solar capacity in India is import content based has been a major deterrent while bidding for projects or computing tariffs.

A basic Customs duty of 40 per cent on solar cells and 25 per cent on modules will come into effect from April 1, 2022. There was a 15 per cent safeguard duty on solar imports, which will expire this month. 

With the Centre pushing a mega tender for solar manufacturing and a production-linked incentive (PLI) scheme, several players are expected to boost the capacity. Adani Green and Azure Power won the contract for India’s first solar manufacturing tender last year.

For the PLI scheme, ReNew Power and US-based Cubic PV have showed interest. India has a good wind turbine manufacturing capacity but lack of projects, owing to slow tendering by the Centre, has hurt several players.

Nonetheless, given the high growth opportunities, global players such as Vestas and GE are expanding presence in India, with an eye on off-shore wind energy.