India seeks comments on local manufacturing of solar cells and modules

LG to invest $435 million to expand solar panel manufacturing in Korea

India Government has recently issued a consultation paper to encourage manufacturing of solar cells and modules in the country.

The objective of the initiative is to have the entire spectrum of manufacturing – from poly-silicon to modules. The policy proposes a direct financial support of more than Rs 11,000 crore and a large indirect support by way of concessions.

The last date for submitting your recommendations is December 31, 2017.

Objectives of the Scheme

To create end to end solar PV manufacturing capacity in India by way of building up manufacturing capacity of solar PV modules, cells, wafers/ ingots and polysilicon in India.

To ensure manufacture of quality solar PV equipment in the country

To insulate the domestic solar power industry from the vicissitudes of international market

To use this policy to create skilled jobs, and in domestic technology self-sufficiency

To convert India from a net importer country to a net exporter country and becoming a global player in solar manufacturing

Target of National Solar Mission

Deployment of 20,000 MW of grid connected solar power by 2022 to be achieved in 3 phases (first phase up to 2012-13, second phase from 2013 to 2017 and the third phase from 2017 to 2022)

2,000 MW of off-grid solar applications including 20 million solar lights by 2022

20 million sq. m. solar thermal collector area

To create favourable conditions for developing solar manufacturing capability in the country

Support R&D and capacity building activities to achieve grid parity by 2022

India Government in June 2015 revised the target of Grid Connected Solar Power Projects from 20,000 MW to 1, 00,000 MW by the year 2021-22. Target of 100 GW is to be achieved through 60 GW ground mounted solar projects and 40 GW rooftop solar systems. India plans to install additional 90 GW of solar power capacity in the next five years.

Manufacturing challenges

The installed capacity is limited to that of cells and modules, and other stages of the manufacturing chain have not yet started in the country. The existing capacity is mainly under the conventional technology of multi-crystalline Al-BSF (Aluminium-Back Surface Field) solar cells, which have efficiency limitations. Very few players have ventured into the superior PERC (Passivated Emitter Rear Cell) technology.

The present maximum solar cell manufacturing capacity per year is only around 3 GW against an average requirement of 20 GW i.e. 15  percent. Balance capacities have to be procured from international market. Energy Security demands that at least 60-70 percent of the manufacturing capacity should be located within the country.

Reasons for poor manufacturing

The country does not have a manufacturing base for Poly-silicon, Ingots/wafers, the upstream stages of solar PV manufacturing chain, which is a very energy intensive process.

There is lack of integrated set up, economies of scale & modern technology resulting in higher cost of production. Price of solar equipment produced in the country is not competitive as compared to that of foreign manufacturers, especially Chinese manufacturers.

The domestic manufactures have to borrow at higher interest rates, compared to foreign manufacturers, pushing up their cost of production.

Since the assured market available to domestic manufacturers is limited, they are not able to set up larger plants, making them lose on economies of scales. Present assured schemes under Domestic Content requirement (DCR) schemes are not enough to be able to meet existing manufacturing capacity.

Due to bleak future prospects, the manufactures are not motivated towards setting up of higher manufacturing capacity. As per industry’s views, some of the reasons for poor manufacturing capacity are high cost of land/ electricity, low capacity utilization, high cost of financing, and lack of skilled workforce.