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Photo-voltaic industry and CPSU scheme

  • Category
    Environment
  • Published
    7th Mar, 2019

Cabinet Committee on Economic Affairs (CCEA) approved Rs 8,580 crore for solar power projects developed under the second phase of the Central Public Sector Undertaking (CPSU) scheme. This is expected to add 12 gigawatt (GW) capacity to the power grid between 2019-20 and 2022-23.

Issue

Context

Cabinet Committee on Economic Affairs (CCEA) approved Rs 8,580 crore for solar power projects developed under the second phase of the Central Public Sector Undertaking (CPSU) scheme. This is expected to add 12 gigawatt (GW) capacity to the power grid between 2019-20 and 2022-23.

With this move, the long-standing ‘import versus manufacturing’ debate that has dogged India’s solar sector has resurfaced

About

CCEA has recently approved an extension to the existing 1,000 megawatts (MW) central public sector undertaking (CPSU) scheme under the National Solar Mission (NSM), taking the cumulative capacity approved under it to 12 gigawatt (GW).

The new funds allocated for the CPSU scheme, is a welcome relief for existing manufacturers, given the slowdown that has hit the sector.

Background

The domestic photovoltaic (PV) manufacturing sector has struggled to capitalize on the solar boom — 88 per cent of solar modules are still imported, with China supplying the lion’s share.

Buoyed by oversupply at home along with state support, Chinese manufacturers are able to supply solar panels significantly cheaper, contributing to falling solar power tariffs in India’s competitive reverse bidding auctions.

After the Indian Solar Manufacturers Association (ISMA) sought an anti-dumping duty on modules from China, Malaysia and Taiwan, a safeguard duty of 25 per cent was levied. It is to be progressively lowered to 15 per cent over two years.

There is another trouble brewing over the Domestic Content Requirement (DCR). DCR lays down that a certain percentage of modules will have to be made in India — in the National Solar Mission and state auctions.

DCR ran into trouble with World Trade Organization (WTO) regulations, and was scrapped in 2017.

Types of technology utilized in the solar panels

Monocrystalline:

  • This is the oldest and most developed technology.
  • These are created from a single continuous crystal structure.
  • A Monocrystalline panel can be identified from the solar cells which all appear as a single flat color.

Polycrystalline:

  • Polycrystalline also start as a silicon crystal ‘seed’ placed in a vat of molten silicon. However, rather than draw the silicon crystal seed up as with Monocrystalline the vat of silicon is simply allowed to cool.
  • This is what forms the distinctive edges and grains in the solar cell. Polycrystalline cells were previously thought to be inferior to Monocrystalline because they were slightly less efficient.
  • This has become the dominant technology in the residential solar panels market because of the cheaper method and slightly lower efficiencies

Thin Film:

  • Comparatively new technology. A thin film panel can be identified as having a solid black appearance.
  • They may or may not have a frame, if the panel has no frame it is a thin film pane. They have the lowest efficiency.

Other related terms

Photovoltaic:

  • It is the process of converting sunlight directly into electricity. A photovoltaic system uses solar panels to capture sunlight’s photons.
  • These solar panels each have many solar cells made up of layers of different materials. An anti-reflective coating on top helps the cell capture as much light as possible.
  • Beneath that is a semiconductor (usually silicone) sandwiched between a negative conductor on top and a positive conductor on bottom.
  • Once the photons are captured by the solar cell, they begin releasing the outer electrons of atoms within the semiconductor.
  • The negative and positive conductors create a pathway for the electrons and an electric current is created. This electric current is sent to wires that capture the DC electricity.
  • These wires lead to a solar inverter, which then transforms it into the AC electricity used in homes.

Viability gap funding:

  • Means a grant one-time or deferred, provided to support infrastructure projects that are economically justified but fall short of financial viability.
  • The lack of financial viability usually arises from long gestation periods and the inability to increase user charges to commercial levels.
  • Infrastructure projects also involve externalities that are not adequately captured in direct financial returns to the project sponsor.
  • Through the provision of a catalytic grant assistance of the capital costs, several projects may become bankable and help mobilize private investment in infrastructure.

Safeguard duty:

The duty, typically imposed during import surges, is meant to protect domestic manufacturers.

Jawaharlal Nehru National Solar Mission/National Solar Mission (NSM):

  • It is one of the eight key National Mission’s which comprise India’s National Action Plan on Climate Change (NAPCC), launched in June 2008.
  • GoI approved National Solar Mission in January, 2010
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