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Government approves Rs 19500 crore PLI for solar modules

The government anticipates that this financial assistance will stimulate investment of Rs94,000 crore in an industry that is heavily dependent on imports.

September 22, 2022 8:07 IST | India Infoline News Service

On Wednesday, the Cabinet approved an extra Rs19,500 crore in funding for the production-linked incentive (PLI) plan for the development of high-efficiency solar modules.

The government anticipates that this financial assistance will stimulate investment of Rs94,000 crore in a heavily dependent on imports industry, resulting in the domestic production of 65 GW of completely and partially integrated solar photovoltaic modules.

The National Logistics Policy was also approved by the Cabinet, along with amendments to the incentive system for semiconductor, display fab, and compound semiconductor manufacturing.

Reliance New Energy Solar, Adani Infrastructure, and Shirdi Sai Group have received letters of award from the government for the first tranche of the PLI on the National Programme on High-Efficiency Solar PV Modules, valued at Rs4,500 crore.

The Cabinet-approved bid design will result in 29 GW of fully integrated manufacturing plants, 18 GW of plants integrated from wafers to modules, and 18 GW of plants integrated over cells and modules, according to renewable energy secretary Indu Shekhar Chaturvedi.

Making modules involves four steps: polysilicon, wafers, cells, and modules. There is no capability for producing polysilicon or wafers at India's 15 GW production plants.

The PLI supports each stage, allocating Rs12,000 crore for fully integrated polysilicon to wafers to cells to modules capacity, Rs4,500 crore for wafers to cells to modules integration in three stages, and Rs3,000 crore for integration between cells and modules.

In addition to 6 GW outside of PLI schemes, the total module manufacturing capacity under both PLI tranches is anticipated to be 74 GW.

The incentive program is predicted to replace Rs1.37 lakh crore in imports while also adding 195,000 direct jobs and 780,000 indirect jobs, according to the government.

On sales of high-efficiency solar PV modules, PLI will be paid out for five years following the commissioning of solar photovoltaic (PV) manufacturing facilities.

To generate the desired 500 GW of renewable energy by 2030, the nation will require a solar energy capacity of between 280 and 300 GW. "Our domestic requirement will be 30-35 GW of modules for the future years up to 2030," Chaturvedi said, adding that the capacity will satisfy both domestic and export requirements.

To promote the Aatmanirbhar Bharat project, the government put a 25% customs charge on imported solar cells into effect on April 2.

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