US-based First Solar will have invested $700 million in its upcoming 3.4 giga watt (GW) solar module unit at Sriperumbudur near Chennai by the second half of 2024, its country managing director Sujoy Ghosh told FE. The company has fast-tracked indigenisation of component sourcing to qualify for production linked incentive (PLI) by as early as 2025-end, he said, adding that it has no plan to import materials from China. “We are focused on building our supply chain locally, for the plant to start commercial shipments by this October. The plan is to meet local value addition threshold required under the PLI scheme by the end of 2025,” he said.
The PLI threshold starts at about 70%, and goes up to 90% over the five years.While there are about 10 components like front glass, frames and low-voltage connectivity devices that go into module manufacturing , the supply ecosystem to localise all of these will be developed in tune with the PLI schedule, Ghosh said.Once First Solar completes the localisation and other parameters under PLI, it can avail up to Rs 1,177 crore over five years based on incremental production.
Saint-Gobain India, the India arm of the French multinational, is setting up a captive thin glass manufacturing unit for First Solar near its project site “Upstream glass production is available in India, but finishing has to be done as per our needs. Hopefully, they (Saint- Gobain) will be ready (with supplies) by the time we need to source the finished glass,” he said.
First Solar has started the trial runs with a view to securing the required certifications like BIS, ALLM, other local approvals and certain global certifications over the next three months. Commercial shipments will begin in October. The plant will reach its full nameplate capacity of producing 3.4 GW after a year.As for the investment, Ghosh said, “By the time we hit our full capacity next year, we would have invested $700 million. Of this $500 million of credit line has been extended by the US Development Finance Corporation (USDFC).”Besides, he said, as all the manufacturing units of First Solar in the US, Malaysia, Vietnam and India with a combined annual nameplate capacity of about 21 GW by 2026, are 100% owned by the company, “we have got enough on our balance sheet”.
First Solar thin film photovoltaic (PV) modules are produced using a fully integrated, continuous process under one roof that does not rely on Chinese crystalline silicon (c-Si) supply chains. “We neither export anything to or import anything from China,” Ghosh said.
As most of the equipment to build the factory at Sriperumbudur was imported with high duty, First Solar got the Export Promotion Capital Goods (EPCG) licence in 2022 and needs to export four and a half times of the duty saved under the scheme within a period of four years by 2026.“This will not be a major component of our production. The investment decision on this factory is purely to support the domestic market, India’s needs for solar PV,” he said, adding that mostly the company’s products are intended for utility scale applications — grid-connected ground mount power plants, and not residential rooftops and smaller applications.