Various Measures Taken by Government for Promotion of Local Manufacturing of Solar Panels

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R K Singh, Government of India
A file photo of R K Singh, Minstry of Power & Renewable Energy, India

Union Minister for Power and New and Renewable Energy (MNRE), Shri R.K. Singh in a written reply in Lok Sabha informed that, in order to promote local manufacturing of solar panels, the Government has taken a number of steps, which including:

Govt has modified Special Incentive Package Scheme (M-SIPS) Scheme of Ministry of Electronics & Information Technology: The scheme mainly provides subsidy for capital expenditure – 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs. The Scheme was open to receive applications till 31st December, 2018.

Production Linked Incentive (PLI) Scheme for High Efficiency Solar PV Modules: In order to enhance India’s manufacturing capabilities and exports, MNRE has issued the Scheme Guidelines for Production Linked Incentive Scheme ‘National Programme on High Efficiency Solar PV Modules’, with an outlay of Rs. 4,500 crores. The Scheme has provisions for supporting setting up of integrated manufacturing units of high efficiency solar PV modules by providing Production Linked Incentive (PLI) on sales of such solar PV modules.

Preference to ‘Make in India’ in Public Procurement in Renewable Energy Sector: MNRE has inter-alia, prescribed that in public procurement of items in respect of which there is sufficient local capacity and local competition, only Class-I local supplier shall be eligible to bid. Class-I local supplier means a supplier or service provider, whose goods, services or works offered for procurement, has local content equal to or more than 50%. Solar PV modules are one of the products identified as having sufficient local capacity and competition.

Domestic Content Requirement (DCR): Under some of the current schemes of MNRE namely CPSU Scheme Phase-II, PM-KUSUM and Grid-connected Rooftop Solar Programme Phase-II, wherein government subsidy is given, it has been mandated to source solar PV cells and modules from domestic sources.

Imposition of Basic Customs Duty on import of solar PV cells & modules: The Government has announced imposition of Basic Customs Duty (BCD) on import of solar PV cells and modules with effect from 01.04.2022.

Discontinuation of Customs Duty Concession benefits: Ministry of Finance (Department of Revenue) has rescinded its earlier Notification, thereby withdrawing the benefit of concessional customs duty on the items imported for initial setting up of the solar power projects with effect from 02.02.2021.

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