India has invited proposals for setting up 10 gigawatt (GW) of solar equipment manufacturing capacity. This follows India’s plan of imposing tariff and non-tariff barriers to put a check on all imported solar cells, modules and inverters, that will make their sourcing from China expensive. Around 80 per cent of the solar cells and modules used here being bought from China and accounted for around $2.16 billion of imports in 2018-19.
Public sector companies such as NTPC and BHEL may also set up polysilicon manufacturing plants in the country to help reduce India’s dependence on China for import of wafers, ingots and cells for integrated manufacturing of solar modules under the Atmanirbhar Bharat Abhiyan. Chinese manufacturers have increased the price of wafers that goes into the manufacturing of cells after India increased the production of cells under the Atmanirbhar Bharat Abhiyan.
India has a domestic manufacturing capacity of only 3 GW for solar cells. Recently, Adani Green Energy Ltd which already has a 1.5 GW solar PV cell and modules manufacturing capacity bagged a manufacturing-linked solar contract, that entails setting up 2 GW of additional solar cell and module manufacturing capacity.
Prime Minister Narendra Modi has said that as part of Atma Nirbhar Bharat, the country’s aim is to end its import dependence on all equipment including solar panels. He has also stated that India won’t be able to fully use its solar power potential, unless the country doesn’t develop better solar panel, battery and storage manufacturing capacity.
Imposition of tariff and non-tariff barriers has created traction for firms to set-up domestic manufacturing of solar cells and modules here, with the strategy aimed at pushing India’s attempts to become an integral part of global supply chains, as firms look to move production lines out of China following the coronavirus pandemic. India also plans to offer land near major ports for setting up solar equipment manufacturing.
There is a growing demand for solar equipment in India given the solar power trajectory planned for the country. Green energy projects now account for more than a fifth of India’s installed power generation capacity. India has 34.6 GW of solar power, with an aim to have 100 GW of solar capacity by 2022.