To boost the solar manufacturing sector, The Indian government declared a $600 million incentives scheme over the next five years.
Helping to grow the solar equipment manufacturing sector, the Ministry for New and Renewable Energy of India announced the guidelines for a production-linked incentives scheme recently.
According to this scheme, Incentives will be offered to manufacturers of polysilicon, wafers, cells, and modules. The Ministry will call for bids from manufacturers to allocate the earmarked incentive.
The ministry plans to give the incentive to at least three different solar manufacturing companies which have either 2 GW manufacturing capacity or will have 50% manufacturing capability of the bid, whichever is lower.
However, a company must set up at least 1 GW of the production line to receive incentives. The scheme is open for both types of companies, looking to set up new production lines as well as those looking to expand existing lines.
The selection and the payment of incentives are based on the company’s capacity, the efficiency of the modules produced and the extent of integration into the value chain from polysilicon to module. Companies must have their production lines up and running within 1.5 to 3 years of receiving offers.
Rating agency ICRA written down that the program could support the development of 21 GW of cell-to-module production capacity over the next five years. This new capacity could cover around 50% of India’s annual module demand during this period.
The production-linked program is the latest in a series of efforts by the Government of India to support the manufacture of solar panels domestically. India currently charges a Protection obligation of 14.8% on imported solar cells and modules. The government decided to do so in March Collect customs duty 40% on modules and 25% on solar cells.
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