MNRE, finance ministry in talks to launch PLI scheme for polysilicon

The ministry is in discussions with the finance ministry to introduce incentives for domestic polysilicon production, aiming to reduce import dependence and build a fully integrated solar manufacturin

The Ministry of New and Renewable Energy (MNRE) is in discussions with the Ministry of Finance to launch a production-linked incentive (PLI) scheme aimed at boosting domestic manufacturing of polysilicon, a critical component in the upstream solar power value chain. 

Polysilicon, a highly purified form of silicon, is used as the primary raw material for more than 95 per cent of solar panels globally. It is produced by refining silicon into multi-crystalline structures, which are then melted to produce wafers, solar cells, and finally photovoltaic (PV) modules. 

As part of its push for self-reliance and to reduce dependence on cheap Chinese imports, India has expanded its solar manufacturing capacity in the past few years, mostly based on the Advanced List of Models and Manufacturers (ALMM) schemes.

 

Currently, India has a solar module manufacturing capacity of 172 gigawatts (Gw) and around 65 Gw of cell capacity. “We have created adequate capacity in these areas, but we still depend on imports for upstream components. “For that, we are discussing a scheme with the finance ministry to support polysilicon manufacturing,” MNRE Secretary Santosh Kumar Sarangi said in an

interaction with Business Standard. 

He added that the ministry has not introduced ALMM for polysilicon because, while the ingots-to-modules value chain is dominated by solar manufacturers globally, the same players may not enter into polysilicon manufacturing, which is a different ball game. 

Globally, the polysilicon industry is highly concentrated, with Chinese firms accounting for over 93 per cent of production. The sector acts as the primary feedstock supplier not only for solar photovoltaic (PV) but also for the semiconductor industry. 

“We think ALMM may not work for polysilicon because the stakeholders are different. So, we might have to push a PLI kind of a scheme for that. We are in discussion with the finance ministry to see the kind of support that would give us investment in this particular area,” Sarangi added. 

Last month, the ministry introduced ALMM List-III to promote domestic manufacturing of ingots and wafers. Under this provision, solar projects will be required to source these components locally starting June 2028, supporting the goal of a fully integrated solar supply chain 

At present, ALMM List-I for solar modules is already in force, while ALMM List-II for solar PV cells is set to come into effect on June 1.