Greater attention is to be given to boosting and supporting India’s domestic solar PV manufacturing industry following the news that the Ministry of New and Renewable Energy (MNRE) is to introduce a scheme designed to support the installation of 7.5 GW solar capacity using home-made components.
Under proposals for phase 2 of its CPSU Program, the MNRE has outlined plans to support wherever it can the domestic manufacturing solar sector in India. Faced with an impending anti-dumping case against Chinese, Taiwanese and Malaysian solar cells– but also recently having fallen foul of World Trade Organization (WTO) rules on its imposition of a Domestic Content Requirement (DCR) – the government has to chart a very careful path between protectionism and the free market.
Hence, the MNRE’s proposal in a report titled National Solar Mission – An Appraisal, presented during a Lok Sabha committee meeting on energy late last week, comprehensively lays out the ministry will tackle these challenges facing the sector.
Chiefly, the overall aim is to support existing PV manufacturers in India to enable them to compete against foreign suppliers. The difficulty here is simply a matter of cost: Chinese solar modules are much cheaper than those produced domestically, so MNRE is to run a cost analysis looking at where the price differentials lie across the production chain, and hopefully identifying ways to bridge these gaps.
This plan will involve “working at encouraging development of world-class facilities” by “addressing the issues of technology obsolescence and fragmented, small-scale operations that are the major challenges currently being faced by the domestic solar PV manufacturing industry in India”, said the MNRE.
“This may be the answer to avoid a disruptive anti-dumping tariff imposition by providing a market for domestic manufacturers – if this proposal can get approved,” said Raj Prabhu, CEO of Mercom Capital Group. “However, it needs to be done in a way that does not violate the WTO ruling and the CPSUs will have to actually auction and procure solar through DCR, even though these projects will be expensive compared to Non-DCR projects.”
So far, the MNRE has allocated just over 1 GW of solar capacity under phase 1 of the CPSU Program, with around 445 MW of capacity already commissioned.
By Baishakhi Dutta
