The Cabinet on Wednesday approved a Rs 19,500-crore production linked incentive (PLI) scheme for the solar sector, with an aim to promote domestic manufacturing of high-efficiency solar photovoltaic (PV) cells and modules. The scheme is expected to generate investments to the tune of Rs 94,000 crore in the high-growth sector, and cut import dependence for these products in a big way.
The scheme is also in keeping with India’s commitment to reduce carbon intensity of its energy sector and the economy as a whole.
The move comes at a time when domestically produced solar panel prices are now being sold roughly at par with imported ones, thanks to a basic customs duty imposed in April. India until recently used to meet three-fourths of its solar panel requirement via imports.
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One of the the benefits expected from the PLI scheme is that about 65,000 MW per annum manufacturing capacity of fully and partially integrated solar PV modules would be installed, information and broadcasting minister Anurag Thakur said. The new investments will also help generate about 0.2 million direct jobs. The reduction in import substitution from the incentive scheme for domestic manufacturing is estimated to be Rs 1.37 trillion.
A clutch of firms including Reliance New Energy Solar, L&T as well as solar outfits of Adani and Tata Groups are expected to benefit from te scheme.
An earlier Rs 4,000 crore PLI scheme for the sector received good response from the industry.
The government is also considering a proposal to split the solar PLI scheme into different components to ensure that all parts of the manufacturing value chain is adequately incentivised.
India has set target to have installed solar capacity target of 280 giga watt by 2030.
Under the PLI scheme, solar manufacturers are selected through competitive bidding. The incentives will be disbursed for five years post commissioning of the units, depending on sales of high efficiency modules. State-run Indian Renewable Energy Development Agency Ltd (IREDA) is the nodal agency.