Strong Underlying Demand To Support Solar PLI Scheme Expansion to Rs 24,000 Crore

Power and MNRE Minister R.K Singh has informed a news agency that the government is planning to enhance funding under the production linked incentive (PLI) scheme for the domestic solar cells and module manufacturing to Rs 24,000 crore from the existing Rs 4,500 crore to make India an exporting power.

The move follows the strong response to the solar PLI scheme being handled by IREDA. There was total industry bids for almost 55 GW of manufacturing, covering all stages from polysilicon manufacturing to modules. Eventually, the agency has picked three of the bidders who offered all 4 stages. That leaves a strong pipeline of prospective investors waiting.

The PLI scheme started with the aim of adding 10,000 MW manufacturing capacity of integrated solar PV modules. With the increase in allocation to Rs 24,000 crore, the potential capacity push could be as high as 40 GW more, easily positioning the country as an exporter. With well established markets in Europe and the US for India made solar equipment, the opportunity definitely exists, considering the massive solar addition plans across the globe.

IREDA Opens PLI Bids. Solar Manufacturing Likely To Get Some New Names

Also Read

The PLI scheme has already achieved some key milestones, including attracting a whole new set of manufacturing players willing to invest in greenfield capacities in the sector. Winners in the Rs 4500 crore phase have included Reliance Industries, Shirdi Sai Electricals and JSW, all newcomers to the space. Incumbent players have also been pushing to expand capacities, be it Waaree Energies or Vikram Solar, besides many more other smaller players.

For India, the scheme became a must considering the country’s own capacity expansion plans, and its high dependence on Chinese imports. Going all the way back to polysilicon manufacturing became critical as China’s dominance across all parts of the solar supply chain left cell and module manufacturers vulnerable to disruptions in other key input costs, especially polysilicon and ingots/wafers.

Considering the shorter gestation period for establishing solar manufacturing, especially cells and modules, India has a real opportunity to see the benefits of its PLI scheme from as early as 2023 onwards if all goes to plan.

PLI Scheme for Manufacturing of High Efficiency PV Modules a Positive for Domestic OEMs: ICRA

Also Read