Government of India approves second batch of PV manufacturing production-linked incentive scheme
Sep 23, 2022
According to reports, India's federal cabinet on September 21 approved the second phase of a production-linked incentive (PLI) program for the advancement of photovoltaic modules, with an expenditure of Rs. 195 billion (approximately US$2.43 billion) for this phase.
At a press conference held after the Cabinet meeting, Anurag Thakur, Minister of State in the Ministry of Finance, said that India's Production Linked Incentive (PLI) under the National Efficient Photovoltaic Module Programme is aimed at achieving gigawatt-scale manufacturing capacity for efficient photovoltaic modules.
He noted that the Indian government has approved an outlay of Rs. 195 billion and wants to create an ecosystem for the manufacture of high-efficiency PV modules in the country.
According to a statement released after the meeting, the scheme will result in an investment of about Rs 940 crore, about 19,500 direct jobs and about 78,000 indirect jobs. The tender is designed in three parts: Rs 120 billion for the production capacity of fully integrated PV systems, including polysilicon, wafers, PV cells, PV modules, etc.; and Rs 45 billion for the integration of products in three phases, the first of which is the integration of PV cells and PV modules.
The Indian Renewable Energy Development Agency (IREDA) will be the implementing agency for the project.
The first tranche of financing was approved last year. Tenders were invited between November and December 2021. The first instalment totalled Rs 4.5 billion. A total of 8.7GW of integrated installed capacity was allocated in the first tranche. The entire PV value chain, from polysilicon to the production of wafers, ingots, cells and modules, implies integrated capacity.
The Indian Renewable Energy Development Agency (IREDA) claims that PV module manufacturers who benefit from the Production Linked Incentive (PLI) scheme will be selected in a more transparent selection process. The incentive will be paid over a five-year period after the PV production facility is commissioned to sell efficient PV modules in the domestic market.
The agency expects that India will have an annual capacity of 65GW of PV modules for the production of fully and partially integrated PV modules. The scheme will replace approximately Rs 1.37 billion of imported PV modules and will also stimulate R&D to produce more efficient PV modules.
Through the implementation of the List of Models and Manufacturers (ALMM) and Domestic Content Requirements (DCR) policies, the Indian government is promoting the process of domestic manufacturing of PV modules. This scheme will further encourage more investors to set up PV module manufacturing facilities in India.
Currently, even without this Production Linked Incentive (PLI) scheme, India's domestic module manufacturing capacity is expected to reach over 25GW by 2024-2025. India's Ministry of New and Renewable Energy (MNRE) Minister R.K. Singh said that as the Indian government sets higher efficiency standards for future production of PV modules, obsolete capacity must be abandoned.
