It’s time to boost domestic solar manufacturing in India. The Indian Cabinet Committee on Economic Affairs (CCEA) has approved a proposal for state-run generators to set up 12 GW of solar projects using domestically-made equipment over the next 4 years. The proposal will provide employment to approximately 200,000 people, directly as well as indirectly.

Under the second phase of the Central Public Sector Undertaking Scheme – overseen by the Ministry of New and Renewable Energy – the government will provide viability gap funding support of Rs8,580 crore ($1.2 billion) through central and state entities for the projects, which would be expected to generate investment of Rs48,000 crore and support Indian manufacturing plants, the CCEA said.

“The scheme will mandate the use of both solar photovoltaic cells and modules manufactured domestically, as per specifications and testing requirements fixed by the Ministry of New and Renewable Energy,” a CCEA statement added.

The cabinet committee said the proposal will provide direct employment to around 60,000 people for a year in the pre-commissioning activities and construction phase, and around 18,000 for 25 years in operations and maintenance. In addition, more than 120,000 additional employment opportunities will be created through involvement in setting up solar projects and in cell and module manufacturing, said the committee.

Talk of such a programme has been in the works for more than a year as the government tries to appease demand at home not just to support solar PV deployment but also to foster a domestic manufacturing industry and reduce the dependence on Chinese imports.

Talking about the overall impact, Sunil Rathi, director, Waaree Energies said: “The move is expected to have a dampening short-term and a positive long-term impact on the industry.”

“While on the face of it, the proposal is set to provide relief to domestic solar manufacturers for the next four years, even with immediate implementation, the on-ground reality indicates a gestation period of at least a year till this proposal actually yields operational benefits. The move fails to provide the much needed immediate support to the sector, due to which mid-scale players may not be able to sustain the pressures for the next year.”

On the upside, “this proposal is bound to attract foreign investment in the long run. We foresee players from China and Malaysia setting up manufacturing hubs in India, thus furthering the ‘Make in India‘ initiative,” he added.

“Moreover, while there are ample module manufacturers in the country to meet the government demands, the proposal would provide impetus to existing and new players to venture into cell production, thus creating job opportunities and enhancing the GDP contribution in the long run,” Rathi said.

Image credits- REUTERS/Ajay Verma


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.