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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 demand will reach 817 GW, with more than half coming from clean energy and 280GW coming only from solar energy.
  • India now has a production capability of 3GW solar cells and 15GW modules.
  • India’s solar cells and modules imports fell to $571.65 million in 2020-21 from $1.68 billion in 2019-20.

How does India plan to give a push to solar cell manufacturing?

  • In the Union Budget 2022-23, Rs 19,500 crore has been allocated to boost the manufacturing of solar modules under the government's flagship Production Linked Incentive (PLI) scheme.
  • The government intends to levy a baseline customs tariff of 40% on modules and 25% on solar cell imports beginning in April 2022.

What is a Production-linked incentive (PLI) scheme?

  • In March 2020, the central government launched the production-linked incentive (PLI) plan to help India become a more competitive competitor in global markets while also increasing local manufacturing and exports.
  • The PLI initiative attempts to provide enterprises with incentives for increased sales of items created in domestic units.
  • The initiative welcomes international corporations to establish units in India; however, it also seeks to encourage domestic enterprises to establish or expand existing manufacturing facilities, therefore increasing employment and reducing the country's dependency on imported goods.

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