21 Feb 2022 , 03:46 PM
Further, the GoI has a solid policy focus to encourage the domestic manufacturing for photovoltaic (PV) modules through various policy measures announced in last 2-3 year period such as notification of approved list of module manufacturers (ALMM) w.e.f. April 2021, imposition of basic customs duty (BCD) on imported cells & modules w.e.f. April 2022, award of manufacturing linked PPAs for aggregate capacity of 12 GW, ongoing implementation of production linked incentive (PLI) scheme as well as that of various central schemes announced earlier, requiring use of domestic modules.
Further, ALMM list has only domestic solar OEMs and there remains an uncertainty for inclusion of foreign solar OEMs as of now,” GirishKumar Kadam added.
Given the strong response for the PLI scheme for solar modules, the scheme outlay has been further increased to Rs240 billion from Rs45 billion earlier. This is expected to support the setting up of additional cell & module manufacturing capacity of up to 40 GW. The module manufacturing units set up under PLI scheme would be eligible for receiving PLI on annual basis on sales of solar PV modules for 5 years from commissioning or 5 years from scheduled commissioning date, whichever is earlier.
PLI payable will also be computed based on the volume sales, the base PLI rate, the tapering factor and the extent of local value addition.
The PV module price environment has however remained elevated over the last 10-12 month period, with the demand-supply imbalances in polysilicon as well as supply chain disruptions in China. Given that the import dependency for the OEMs is expected to continue for sourcing of key components, the pricing behaviour for polysilicon and cells in China thus remains a key monitorable, going forward.
Commenting further, Mr. Vikram V., Vice President & Sector Head — Corporate Ratings, ICRA, said, “As a result, OEMs based on imported cells remain exposed to volatility in cell /module price levels. Based on an imported module price level of 27 cents/watt for Mono PERC modules and cell price at 15 cents/watt, the cost of module from such domestic OEMs is expected to be lower by 10-11% post April 2022, assuming the applicable BCD on imported cells/modules. However, the extent of discount will reduce, if the prices of imported cells and modules reduce from the prevailing level. From the viability perspective in case of OEMs with integrated facilities, the scale of operations, pace of technology adoption with the emerging trends in key markets such as in China/Europe as well as module price movement remain the critical factors.”
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