India releases guidelines for production incentives to push solar PV module manufacturing

India’s Ministry of New and Renewable Energy (MNRE) has released guidelines for the production-linked incentive (PLI) scheme in an effort to encourage domestic manufacturing of high-efficiency solar PV modules and reduce import dependence.

In November 2020, the government had approved and allocated an amount of Rs 4,500 crore to be spent over a period of five years on such schemes. According to the guidelines, the PLI scheme will be implemented by MNRE through the Indian Renewable Energy Development Agency (IREDA) as implementing agency.

IREDA will be eligible for 1 percent of the PLI amount disbursed as administrative charges annually.

The responsibilities of IREDA include receipt of applications, examination, and appraisal of applications as per the modalities of the PLI scheme, issuing acknowledgments to applicants, making appropriate recommendations to MNRE after assigning inter-se ranking for approval of beneficiaries, examination of claims of beneficiaries for disbursement of PLI.

IREDA will also be accountable for the compilation of data regarding the progress and performance of the scheme through Quarterly Review Reports and other documents.

It is envisaged that the beneficiaries will be selected by a transparent bidding process. However, preference will be given to manufacturers who set up higher capacity plants.

“In order to qualify for the bid, the applicant manufacturer will have to undertake to set up a manufacturing plant of minimum 1,000 MW capacity,” the ministry said.

The scheme is not only aimed at promoting the setting up of integrated plants for better quality control and competitiveness but also  to develop an ecosystem for sourcing local material in solar manufacturing, generating  employment and reducing the country’s import dependence.

The guidelines further state that Greenfield new solar PV module manufacturing units will be eligible for PLI and brownfield projects will also be allowed to participate under the eligibility criteria.

It added that though a manufacturer can bid for any megawatt capacity, the maximum capacity that can be awarded to one bidder under the PLI scheme remains 50 percent of the bid capacity or 2,000 MW, whichever is less, to accommodate at least three manufacturers under the overall envelope of Rs 4,500 crore.

Manufacturing units not eligible for the Rs 4,500-crore PLI scheme will be outfits that have already availed the benefit under the modified special incentive package scheme (M-SIPS) programme of electronics ministry.

Also, manufacturing units that have imported capital goods for setting up the module manufacturing facility before the last date of bid submission will be excluded from consideration of the PLI program.

Regarding disbursement under the scheme, the guidelines added that the manufacturing units sanctioned under the programme would be eligible for getting PLI on the annual basis on sales of high-efficiency solar PV modules for five years from commissioning or five years from the scheduled commissioning date.

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