Solar plants availing benefit under M-SIPS not eligible for solar PLI scheme

India’s Union ministry of new and renewable energy (MNRE) has said that solar units availing benefits under the modified special incentive package scheme (M-SIPS) programme of electronics ministry will not be eligible for the Rs 4,500-crore production-linked incentive (PLI) scheme for solar module manufacturing. 

The MNRE released broad guidelines on how PLI scheme can be availed by domestic solar manufacturers, where it said that the beneficiaries of the PLI scheme will be selected through competitive bidding. Evaluation of the bids will be done by the Indian Renewable Energy Development Agency (IREDA) on the basis of manufacturing capacity proposed to be set up by the companies and the extent of elementary products required for manufacturing solar panels they promise to make in the country, it said.

Polysilicon, wafers and cells are the basic building blocks for making solar modules, and the minuscule manufacturing base of these products result in continued reliance on imports. A company trying to set up manufacturing capacities for polysilicon, wafers, cells and solar modules will be prioritised for receiving PLI. Presently, the 3 giga-watt (GW) of cell manufacturing units and the 10 GW of domestic solar module makers have to import most of their components from outside.

Firms willing to build polysilicon to module manufacturing units will get three years to commission their plants, while wafer to module units and cell to module plants will get two years and one and a half years, respectively. There will be penalties for commissioning delays from the scheduled timelines through lower PLI receipts. The PLI will be given annually for five years from the date of commissioning.

Companies producing more efficient products will be eligible for higher PLI. About 50% of the country’s solar manufacturing capacity currently remains unutilised as developers have preferred to import cheaper equipment, mostly from China, to build solar plants.

To boost domestic manufacturing, the Centre had imposed a 25% safeguard duty on solar imports from China and Malaysia in July 2018 for two years, which was extended to July 2021, at a rate of 15%.

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