India approves second tranche of production-linked incentive worth Rs 19,500 crore for solar modules

India’s Union Cabinet approved the Rs 19,500-crore proposal of the Ministry of New and Renewable Energy (MNRE) for the second tranche of the ‘production-linked incentive’ (PLI) scheme for solar equipment manufacturing.

This is part of ‘National programme on High Efficiency Solar PV Modules’ for achieving manufacturing capacity of giga watt (Gw) scale in high efficiency solar photovoltaic (PV) modules.

“The scheme will bring direct investment of around Rs 94,000 crore and will lead to creation of manufacturing capacity for allied equipment in the solar manufacturing chain,” said a statement. It said the scheme would also induce direct employment for 195,000 people and indirect employment of about 780,000.

Union Power Minister R K Singh exuded confidence that the scheme will help save close to Rs 1.4 trillion forex every year. “This (PLI-II for solar module) will lead to a saving of Rs 1.4 trillion saving because of domestic manufacturing. And it will also result in a huge quantity of inflows on account of exports,” Singh said.

In the first tranche of tendering, MNRE received close to 50 Gw of bids against a PLI sanction of Rs 4,500 crore. It received close to 18 bids from a range of companies — Coal India, L&T, Vikram Solar, Megha Engineering and several new companies. The winners, apart from RNESL, were Adani Infrastructure and Shirdi Sai.

The corpus was increased to Rs 19,500 crore under the Union Budget 2022-23 to accommodate the large number of bids.

The new round of the PLI will have three different schemes for different product categories, this paper reported recently. Of the allocated corpus, the highest share of Rs 12,000 crore could go to end-to-end manufacturing of ‘polysilicon-wafers-cells-modules’ (raw material to finished product).

For ‘wafer-cells-modules’, the government will allocate Rs 4,500 crore and for ‘cells-modules’ manufacturing, Rs 3,500 crore has been allocated. “The scheme may now be viewed as three separate standalone schemes. In case a particular category is undersubscribed, the remaining funds will move to the other categories,” said the draft proposal of the MNRE. Close to 80 per cent of India’s solar power capacity is built on imported solar equipment.

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