India gives lift to solar PV manufacturers with $2.6b additional funding

Under the PLI scheme, India sought to promote and push the domestic PV module manufacturing.

The additional $2.6b funding earmarked for the production linked incentive (PLI) scheme will further boost domestic solar photovoltaic (PV) manufacturing in India, data and analytics company GlobalData.

“India’s solar sector is heavily dependent on the imports of solar equipment. The COVID-19 pandemic disrupted the supply chain as solar equipment could not be imported thereby affecting the solar PV capacity additions,” Mohit Prasad, Practice Head of Power at GlobalData, said.

“The imports of components used in the solar industry increased substantially since the launch of the government’s ambitious solar policy – the ‘Jawaharlal Nehru National Solar Mission’. The mission had set the target of deploying 100 GW of grid connected solar power by 2022.”

These are in line with its attempt to achieve its 500-gigawatt (GW) target of renewable energy capacity by 2030, which includes 280GW of solar PV by 2030.

Citing GlobalData, Prasad said annual installations of solar PV grew to 3GW, starting 2015, from only around 1GW in previous years. India also recorded new highs in the subsequent years, primarily driven by imports of solar equipment from China, Malaysia at lower costs.

“This caused many domestic producers to stop their production, resulting in heavy losses thereby crippling the domestic industry,” he added.

The Indian government first introduced the PLI scheme in April 2021 with an initial funding worth $603m. This led to an additional 11GW between January to November 2021.

“With a target of 280 GW for solar PV by 2030, India not only should rely on imports but must also promote domestic manufacturing sector,” he said.

“The PLI scheme will play an important role in shaping up the domestic solar manufacturing industry and will try to push the sector to achieve the achieve the 2030 target.”