Tata Power Solar doubles solar cell, module manufacturing to leverage PLI scheme

New Delhi: Tata Power Solar Systems Ltd has doubled its solar cell and module manufacturing at its facility in Bengaluru to 1.1 giga watt (GW).

This comes in the backdrop of the Union cabinet, chaired by Prime Minister Narendra Modi on Wednesday, approving production-linked incentives (PLIs), designed to raise local manufacturing and reduce imports from countries like China worth ₹4,500 crore for solar PV modules.

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Tata Power Solar has expanded its manufacturing capacity of cell from 300 MW to 530 MW with Mono PERC and module from 400 MW to 580 MW with Mono PERC Half cut technology.

“The expansion is based on the significant increase in demand that the company has seen for its solar modules, as well as the expected increase in demand due to supportive policy steps announced recently by the Government of India for creating ‘Atmanirbhar Bharat’ (Self-Reliant India),” Tata Power said in a statement on Wednesday.

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

The PLI scheme for solar PV modules is expected to add 10,000 megawatts (MW) of integrated solar PV manufacturing capacity and bring direct investments of about ₹17,200 crore and create 30,000 direct jobs. 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.

“The expansion comes amid the positive intent of the Government of India towards making this country a manufacturing hub and lessen its dependency on other countries as far as import of solar cells and modules are concerned,” the statement added.

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.

The PLI schemes were first announced last year with an aim to create global manufacturing champions in India by removing sectoral bottlenecks and creating economies of scale to develop complete ecosystems for components. This February, the government invited global firms to take advantage of the ₹1.97 trillion worth of PLI schemes for 13 sectors and expand their manufacturing in India.

The PLI scheme for solar PV modules 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, Chinese solar module makers have raised prices by over a fifth since December.

India’s ministry of new and renewable energy has also 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.

India is running the world’s largest clean energy programme to achieve 175 gigawatts (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. To achieve the target of 280GW, around 25GW of solar energy capacity is needed to be installed every year till 2030.