Covid-19 has disrupted solar supply chains and delayed project commissioning across the country. The recent standoff with China has further exacerbated the issue and raised concerns regarding the dependence of the Indian solar industry on foreign imports. This has led the government to renew its focus on promoting domestic manufacturing of solar cells and modules on a large scale. Against this backdrop, Aniruddha Kumar, additional secretary, Ministry of New and Renewable Energy (MNRE) discussed the key government initiatives regarding domestic manufacturing and his outlook on the solar power segment, at a recent India Infrastructure conference on Solar Power in India. Excerpts…
The Indian government has set a near-term target of installing 175 GW of renewable energy by 2022 and a long-term goal of 450 GW by 2030. For achieving these tall targets, it is essential that India develops robust domestic manufacturing capacity. Thus, MNRE is strongly focused on enhancing local manufacturing and has taken many initiatives in this direction. The Solar Energy Corporation of India’s manufacturing-linked tender has been successful and has resulted in the allocation of significant solar capacity both for manufacturing as well as project development. Moreover, the MNRE has initiated a Central Public Sector Undertaking (CPSU) solar scheme which is meant to promote domestic manufacturing. The original target under this scheme was to set up 10 GW of solar capacity. The ministry has received an overwhelming response under the CPSU solar scheme.
Similarly, the Pradhan Mantri Kisan Urja Surakshaevem Utthan Mahabhiyan (PM KUSUM) scheme and rooftop solar programme mandates domestic content requirement. Thus, I feel that there would be healthy demand for domestic solar modules in the country. Moreover, we are getting very positive response from the industry. Both domestic and foreign manufacturers are willing to set up production units for solar cells and modules in the country. Most of them have deep pockets proven credentials of setting up such facilities in other parts of the world. In my view, this is an appropriate time for domestic manufacturing to take off and with the support of various government schemes, the industry is rightly poised for expanding its local supply chains. Thus, overall, I am quite positive that in the next few years, India will have a large domestic solar manufacturing capacity of not less than 10 GW of solar cells and modules per year.
There are many issues that developers are facing today and the MNRE is working towards resolving them. For instance, regarding the safeguard duty passthrough, we will work out a solution to suitably compensate the developers under the “change in law” provision. We are also in consultation with central and state regulators regarding the best possible way to resolve this issue. Similarly, we are working on addressing the delays in land acquisition in solar parks, signing of power purchase agreements and getting tariff approvals, that result in cost overruns for developers. Moreover, the ministry is also exploring the potential of green hydrogen and assessing its commercial viability in India. However, it may take some time for green hydrogen to reach the commercial production stage.
The government is committed towards achieving the set targets for renewable energy. There might be some delay on account of Covid-19 which has disrupted supply chains and pushed back project commissioning schedules. The actual impact of the pandemic on the country’s solar segment is yet to be assessed. We are also aspiring to reach the long-term goal of 450 GW of renewable energy by 2030. To achieve these, MNRE is considereing to extend renewable purchase obligation (RPO) beyond 2022. Further, under the Draft Electricity Act Amendments, RPO compliance is proposed to be made mandatory and non-compliance by obligated entities will be penalised. Thus, we hope that with all these measures in place, we will be able to achieve our goals, as the discoms will have no option but to buy renewable energy or end up paying penalties. In fact, I am quite positive that India will not only meet its international commitments of having 40 per cent renewable capacity in its energy mix by 2030, but over-achieve it by a wide margin.