NEW DELHI: In an attempt to discourage Chinese imports in India’s growing green economy, the ministry of new and renewable energy (MNRE) has issued an order enforcing a list of approved solar photovoltaic (PV) models and module manufacturers for government-supported schemes, including projects from where distribution companies procure electricity for supply to their consumers.
This approved list of 23 modules and manufacturers (ALMM) is a non-tariff barrier and part of India’ strategy of erecting other obstacles, including subsidising finance for promoting local power equipment usage and prior-permission requirements for imports from countries with which it has a conflict, such as China.
Mint had earlier reported about the move aimed to boost domestic manufacturing and to protect domestic companies from cheap and sub-standard imports. A similar scheme, the Registered List of Models and Manufacturers, exists for the Indian wind energy sector.
This comes in the backdrop of government deciding to impose 40% basic customs duty (BCD) on solar modules and 25% on solar cells from 1 April 2022, in a move that would make imports costlier and encourage local manufacturing. These successive orders are to help India emerge as a leading global supplier of these items, besides meeting India’s requirements locally.
According to a 10 March MNRE order, “Only the models and manufacturers included in this list shall be eligible for use in Government/ Government assisted projects/ Projects under Government schemes & Programmes, installed in the country, including Projects set up for sale of electricity to Government under the guidelines issued by Central Government under section 63 of Electricity Act, 2003 and amendment thereof.”
The development assumes significance given that India is running the world’s largest clean energy programme to achieve 175 gigawatts (GW) of renewable capacity, including 100GW of solar power by 2022. According to the Central Electricity Authority, of India’ 817 GW of India’ power requirement by 2030, solar energy will account for 280 GW.
India has a domestic manufacturing capacity of 3 GW for solar cells and 15GW for solar modules. The move by the Centre will also check the practice of some manufacturers claiming production of cells and modules that have been produced elsewhere.
“It is possible that some units may claim production of solar cells & modules produced or made elsewhere. The reliability of producer is essential to protect the consumer interests and ensure larger energy security of the country,” the MNRE order stated.
Mint reported on 7 September, 2017 about poor quality Chinese solar modules, rejected by developers being sold in the domestic market at a discount.
The development follows the government announcing a production-linked incentive (PLI) scheme that offers manufacturers in 10 sectors, including those of high-efficiency solar modules, a total benefit of ₹1.97 trillion. Also, the Union budget has announced a scheme under the Atmanirbhar Bharat package for setting up three manufacturing zones for critical power and renewable energy equipment.
At play is India’s renewable energy programme, which would require $80 billion in investments till 2022. This figure will grow more than three-fold to $300 billion during 2023-30. India imported $2.16 billion worth of solar PV cells, panels, and modules in 2018-19.