Centre approves ₹19,500 cr for PLI Scheme on Solar PV Modules: What You Need to Know

By admin
2 years Ago

The Cabinet approved a ₹19,500 crore (US$2.4 billion) plug-and-play solar photovoltaic (PV) module manufacturing support scheme to encourage domestic production of the modules that are widely used in solar power generation. The scheme would be implemented by the Ministry of New and Renewable Energy (MNRE). The government’s decision comes after a three-month consultation process with more than 40 public and private sector companies and experts in the Indian solar energy industry.

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Incentives under the Scheme

The incentives, which are based on additional sales, range from 1% for electronics and technology products to 20% for the production of certain medication intermediaries and important key starting pharmaceuticals.

The incentive to be paid will be determined based on sales, performance, and local value addition over a five-year period in some industries, such as advanced chemical cell batteries, textile products, and the drone industry.

Benefits of PLI Scheme

The government hopes that domestic manufacturers will be able to compete with international counterparts. As the demand for power is increasing rapidly in India, it was important to have these capacities ready. The scheme also includes generation-based incentives and time-based incentives. Generation-based incentives are applicable only when electricity generated from these projects is put back into the grid by the developer or owner of project; time-based incentives are applicable irrespective of whether electricity generated from these projects are put back into the grid by the developer or owner of project.

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Under the time-based incentive system, developers can get benefits even if they sell the energy generated from their plants to someone else who sells them later on. The government believes that this would encourage developers to invest more in building renewable energy projects.

The programme will attract approximately Rs 94,000 crore in direct investment. The result would be the installation of around 65,000 MW of annual manufacturing capacity for completely and partially integrated solar PV modules. Creating manufacturing capacity for balance of materials such as EVA, solar glass, backsheet, etc. is also anticipated to benefit from the additional boost. A total of 1,95,000 individuals will be employed directly and 7,80,000 people indirectly as a result of the second phase of the PLI Scheme. The national initiative on high efficiency solar PV modules seeks to create a manufacturing environment in India for high efficiency solar PV modules, hence reducing reliance on imports in the field of renewable energy.

Selection Process for PLI Scheme

A transparent bidding process will be used to choose the scheme’s beneficiaries, who will then be assessed based on factors such as greater capacity plants, the degree of integration, and module performance characteristics. For a manufacturing facility with a minimum capacity of 1000 MW, the minimum integration of solar cells and modules must be met. Additionally, a minimum standard for module efficiency and temperature coefficient must be met in order to meet qualifying requirements. The bidders will be ranked according to these selection criteria factors for the distribution of PLI. If there is an oversubscription, MNRE will release a waiting list with an additional cost.

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The manufacturers selected under PLI will be rewarded for their efficiencies and sourcing the material domestically through incentives disbursed for 5 years post commissioning of plants. To calculate the PLI amount, a ‘Base PLI rate’ will be calculated based on module efficiency and temperature coefficient. Other factors which will be accounted to calculate the PLI are: Lesser of actual sales volume or manufacturing capacity awarded under the scheme, local value addition and tapering factor over the five years.

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