Green push: Reliance New Energy Solar, two others win Rs 4,500-crore solar PLI

The new capacities are seen to provide a domestic supply source to an industry which is 80% dependent on imports. As per the recent COP26 announcements, the country has set a target to install 500 gigawatt (GW) of renewable energy capacity by 2030 and much of it is to come from solar plants. (Representative image)

Andhra Pradesh-based transformer manufacturer and EPC contractor Shirdi Sai Electricals, BC Jindal Group’s Jindal India Solar Energy and Reliance New Energy Solar have been selected as the beneficiaries of the production-linked incentive (PLI) scheme for solar panel manufacturing.

Taken together, these companies will set up around 12,000 megawatt (MW) of manufacturing capacities under the scheme, and receive a combined incentive of Rs 4,500 crore.

The new capacities are seen to provide a domestic supply source to an industry which is 80% dependent on imports. As per the recent COP26 announcements, the country has set a target to install 500 gigawatt (GW) of renewable energy capacity by 2030 and much of it is to come from solar plants.

Shirdi Sai Electricals will receive PLI of Rs 1,875 crore over five years and Jindal India Solar will get Rs 1,390 crore. Reliance New Energy Solar, a subsidiary of Reliance Industries (RIL), will get PLI of Rs 1,190 crore. Government sources said if the Centre ratifies the Union ministry of new and renewable energy’s proposal of earmarking an additional Rs 18,000 crore for the solar PLI scheme, the other 13 shortlisted companies, including Adani Infrastructure, FS India Solar Ventures, Coal India, Larsen and Toubro, ReNew Solar, Tata Power Solar, Waaree Energies and Vikram Solar, would also receive its benefits.

The Indian Renewable Energy Development Agency, on May 25, had invited applications from solar module manufacturers for availing the PLI scheme, and the financial bids were opened on October 25. The Cabinet had cleared the scheme on March 31. The beneficiaries of the PLI scheme have been selected through competitive bidding, and ranked on the basis of manufacturing capacity proposed to be set up by companies and the extent of elementary products required for manufacturing solar panels they promise to make in the country.

To boost domestic manufacturing, the Centre had imposed a 25% safeguard duty on solar imports from China and Malaysia in July 2018 for two years, which was extended to July 2021, at a rate of 15%. From the beginning of FY23, solar module and cell imports will attract a basic customs duty of 40% and 25%, respectively. The current installed renewable energy capacity in the country in 103 GW, of which 48 GW is solar. Another 50 GW of renewable energy projects are under implementation and 32 GW projects in various stages of bidding.

Soon after the announcement of the PLI scheme, RIL chairman Mukesh Ambani had said on June 24 that the company had begun developing the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar, which will include manufacturing units for solar cells and modules, a battery unit for energy storage, a fuel cell-making factory and an electrolyser plant to produce green hydrogen. The company intends to spend Rs 60,000 crore on the Jamnagar complex. RIL plans to start with raw silica, convert it to polysilicon, which would be further converted to ingot and wafers which would subsequently be used to make solar cells and modules. Polysilicon, wafers and cells are the basic building blocks for making solar modules, and the minuscule manufacturing base of these products result in continued reliance on imports. The company has also recently announced the acquisition of solar manufacturer REC Solar Holdings from China National Bluestar Group for $771 million.