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8th February 2022 (6 Topics)

India seeks to add to its Solar Cell, Module Manufacturing

Context

The government plans to create additional domestic solar equipment manufacturing capacity of 25 gigawatts (GW) each of solar cells and modules, and 10GW of wafers by April 2023.

About

Current state of Solar Energy Sector in India:

  • According to the Central Electricity Authority:
    1. Solar accounted for 11.8% of the installed capacity
    2. By 2030, India’s power requirement will touch 817 GW, more than half of which would be clean energy and 280GW would be from solar energy alone.
  • India currently has a manufacturing capacity of 3GW for solar cells and 15GW for modules.
  • India’s solar cells and modules imports fell to $571.65 million in 2020-21 from $1.68 billion in 2019-20.

How India plans to give push to solar cell manufacturing?

  • In the Union Budget 2022-23, Rs 19,500 crore has been allocated to boost manufacturing of solar modules under the government’s flagship Production Linked Incentive (PLI) scheme.
  • Government is planning to impose a basic custom duty of 40% on modules and 25% on solar cells imports from April, 2022.

What is Production-linked incentive (PLI) scheme?

  • The central government introduced the production-linked incentive (PLI) scheme in March 2020 to make India a competitive player in global markets and boost domestic manufacturing & exports.
  • The PLI scheme aims to give companies incentives on incremental sales of products manufactured in domestic units.
  • The scheme invites foreign companies to set up units in India; however, it also aims to encourage local companies to set up or expand existing manufacturing units, generate more employment and reduce the country's reliance on imports.

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