Govt. push sees players lining up to make solar equipment

Description

Context: Renewable Energy Ministry has received proposals from a range of players for over 10GW (giga watts) of fresh solar equipment manufacturing.

Details:

The government’s move to shift from the use of short-term ‘safeguard duties’ to protect domestic manufacturers to the imposition of customs duties has induced the industry to “make long-term commitments in terms of investments”.
While the government is yet to officially implement the proposed basic customs duty of around 20-25 per cent on solar equipment, 5 percent interest subvention scheme for the domestic manufacturing of ingots, wafers and cells has gone to the Ministry of Finance.
Despite a 20GW demand for solar cell manufacturing, India’s current average annual capacity is only around 3GW, with nearly 80 per cent of the inputs and components imported from China.
So far, India has implemented only safeguard duties on import of solar equipment from China and Malaysia, which have been extended until July 2021 at a rate of around 15 per cent.
Despite initiatives over the last two years to incentivise domestic production – the safeguard duty, domestic content requirement policy and an approved list of models and manufacturers — the expected scale-up did not materialise until now.
A key reason is that solar cell manufacturing is a complicated process that is technology and capital intensive. Another reason is that solar cell technology sees upgrades every 8-10 months.
Globally, solar wafer and ingot manufacturing is dominated by China, whose companies dominate the Indian solar components market too with their competitive pricing.