IREDA calls solar module manufacturing bids under PLI scheme

New Delhi: State-run Indian Renewable Energy Development Agency Ltd. (IREDA) has invited bids for setting up solar manufacturing units under the government’s ambitious production linked incentive (PLI) scheme.

The ₹4,500 crore PLI scheme for solar photo voltaic modules will help India ramp up its domestic manufacturing capacity. The scheme is expected to add 10-gigawatt (GW) capacity of integrated solar photo voltaic (PV) manufacturing plants and bring direct investment of around ₹17,200 crore.

“MNRE has appointed IREDA as the implementing agency for the scheme,” the ministry of new and renewable energy said in a statement on Friday.

At present, India has a domestic manufacturing capacity of only 3 GW for solar cells and 15GW for solar modules. Along with leveraging its growing green energy market to boost manufacturing, India is looking to play a larger role in global supply chains.

“The minimum capacity of the manufacturing unit to be installed shall be 1,000 Megawatt. The PLI will be disbursed to the successful applicants annually for a period of five years,” the statement said.

PLI schemes, originally announced last year, seek to create global manufacturing champions in India by removing sectoral disabilities and creating economies of scale to develop complete component eco-systems in India. Prime Minister Narendra Modi in February invited global firms to take advantage of the ₹1.97 trillion PLI schemes for 13 sectors and expand their manufacturing in India.

“The applicants are required to set-up either brownfield or greenfield manufacturing facility for the entire capacity allotted under the scheme. Applicants are not allowed to set-up mix of brownfield and greenfield facility under the scheme. Manufacturing capacity/unit, for which required capital goods have been imported before the last date of bid submission, will not be eligible for participation under this PLI scheme,” the statement said.

The domestic manufacturing plan for solar equipment has gained traction with 15 companies considering total investments of around $3 billion to build solar equipment manufacturing facilities here, as reported by Mint earlier. Also, Chinese solar module makers have raised prices by over a fifth since December.

The scheme comes in the backdrop of India’s decision to impose 40% basic customs duty on solar modules and 25% on solar cells from 1 April 2022, a move that would make imports costlier and encourage local manufacturing. Also, MNRE has issued an order enforcing a list of approved solar PV models and module manufacturers for government-supported schemes, including projects from where distribution companies procure electricity for supply to their consumers.

“The last date for submitting application is 30th June. The selection process for the successful bidders is to be completed by 30th July. IREDA had floated the invitation for application document on 25th May on its website and the electronic application process went live on 31st May,” the statement said.

The market for solar components is dominated by Chinese firms. India imported $2.16 billion worth of solar photovoltaic (PV) cells, panels and modules in 2018-19.

“Solar capacity addition presently depends largely upon imported solar PV cells and modules as the domestic industry has limited operational capacities of solar PV cells and modules. The National Programme on High Efficiency Solar PV Modules will reduce import dependence in a strategic sector like electricity and as such reinforce the Atmanirbhar Bharat initiative,” the statement said.

India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, including 100GW of solar power by 2022. According to the Central Electricity Authority, by 2030, the country’s power requirement would be 817GW, more than half of which would be clean energy, and 280GW would be from solar energy alone.