Phase II of the Jawaharlal Nehru National Solar Mission will be announced soon. During this phase, the government aims to achieve 10 GW of cumulative grid connected and 1 GW of cumulative off-grid capacity by 2017. I hope that this time, the government will come up with new and effective strategies to enhance domestic manufacturing of solar modules, as the steps taken to encourage local manufacturers of solar modules under Phase I did not help the Indian industry.
Under Phase I, the government had made it mandatory for the local purchase of crystalline silicon modules, but such a stipulation was not applied for thin film based modules, because the latter are not manufactured locally. India imports almost 80-90 per cent of its thin film based modules from various countries.
As a result, despite more solar energy being produced in India under Phase I, domestic solar panel manufacturers are seen struggling for survival. They hardly have any orders. Most of the solar power plants that are coming up prefer to import their equipment, especially from China. This is because the Export-Import Bank of China provides soft loans at near zero interest rates to those who buy from Chinese module makers. Moreover, Chinese solar cells and modules are 25-30 per cent cheaper than their Indian counterparts. It is also because the technology is shifting to thin film and in India, only one company makes thin film cells and modules.
Currently, 80 per cent of local manufacturers are in a state of forced closure and debt restructuring with no orders coming to them. A major player like Moser Baer is trying hard to recast a debt of Rs 38,000 million. Tata Power Solar, HHV Solar Technologies, Jupiter Solar, WebSol Energy Systems and others are all struggling to survive by either reducing their production capacities or by foraying into the EPC business.
The Phase II draft document, which was made public by the Ministry of New and Renewable Energy (MNRE) on December 4, is rather vague on some critical issues like how the domestic content requirement will be ensured. However, under
Phase II, the government is trying to explore new financing mechanisms, and is using all means to finance the feed-in tariff, including viability gap funding, generation based incentives and the bundling of solar power with conventional power that has not been earmarked for sales under any power purchase agreements.
Under this phase, the government is expected to give an aggressive push to off-grid solar applications. There will be changes in the off-grid scheme to make it simpler, and use of solar power for heating will be encouraged. A 10 MW grid-connected rooftop pilot project will soon be launched, and the government is coming up with guidelines for rooftop solar installations.
–Srabani Sen
