Policy support from the Government of India to promote the domestic module manufacturing supply chain

Indian companies are gearing up to develop domestic manufacturing capability in response to the Government of India’s measures to promote solar manufacturing in India. The country has a history of solar manufacturing dating back to the late 1970s, with companies such as Central Electronics Limited, BEL, BHEL, Tata BP Solar, Moser Baer, Indosolar, and Websol. These companies initially manufactured solar cells and modules for off-grid applications in remote areas and later for export to Europe, the Middle East, and the USA.

During the 2000s, the export market was strong, and Indian products were competitive in terms of both cost and quality. However, solar manufacturing in India floundered due to strong headwinds from China in terms of scale and cost. Nevertheless, manufacturing of cells and modules continued in India, albeit on a modest scale and, in most cases, using older-generation technologies.

In response to India’s National Solar Mission, launched in 2010, with a target of 20 GW by 2020, the Government of India announced measures to promote solar manufacturing in India. These measures include financial incentives such as capital subsidies, interest subsidies, and tax incentives, and the imposition of tariffs on imported solar modules.

In 2020, India announced an ambitious renewable energy target of 450 GW by 2030, of which 280-300 GW is expected to come from solar. These targets imply that India will need to install between 20 and 30 GW of solar PV every year for the coming decade. At these levels of manufacturing, economies of scale will make it competitive again.

Solar energy has been growing in popularity around the world, and India is no exception. In fact, India was one of the few countries that began manufacturing solar cells and modules in the late 1970s. The Indian government has since set ambitious targets for renewable energy production, including solar, and is actively promoting solar manufacturing in the country.

Solar Module and Cell Manufacturing in India

Central Electronics Limited (CEL) was one of the first public sector companies to begin manufacturing solar cells and modules in India. Their earliest modules used silicon solar cells made on 2-inch and 3-inch diameter circular wafers, moving to 4-inch wafers in the mid-1980s. In the 1990s, other companies began manufacturing solar cells and modules in India, including Bharat Electronics Limited (BEL) and Bharat Heavy Electricals Limited (BHEL), both public sector companies that made solar cells for space applications. Tata BP Solar, a private joint venture, addressed the nascent terrestrial applications.

During the 2000s, Tata BP Solar expanded its operations, and several other companies entered the market, including Moser Baer, Indosolar, and Websol. Moser Baer had both amorphous silicon as well as (multi-)crystalline plants. Through the 1980s to 2000s, research and development in academic institutes in India in the areas of semiconductors and solar PV was at a reasonably good level, which helped produce a skilled workforce in this area.

Today, some of the active companies in the solar manufacturing industry in India include:

1. Adani Solar: Adani Solar is part of the Adani Group, a diversified conglomerate with interests in infrastructure, power, and renewable energy. Adani Solar has a manufacturing capacity of 1.5 GW, which includes both solar cells and modules.
2. Vikram Solar: Vikram Solar is a Kolkata-based solar energy solutions provider. The company has a manufacturing capacity of 1 GW for solar modules and 200 MW for solar cells.
3. Waaree Energies: Waaree Energies is another solar energy solutions provider based in Mumbai. The company has a manufacturing capacity of 2 GW for solar modules and 500 MW for solar cells.
4. RenewSys India: RenewSys India is a manufacturer of solar PV modules and components. The company has a manufacturing capacity of 750 MW for solar modules and 130 MW for solar cells.
5. Tata Power Solar: Tata Power Solar is a subsidiary of Tata Power, one of India’s largest power generation companies. Tata Power Solar has a manufacturing capacity of 1.1 GW for solar modules and 330 MW for solar cells.

Government Policies to Promote Solar Manufacturing in India

The Indian government has set ambitious targets for renewable energy production, including solar, and is actively promoting solar manufacturing in the country. In 2010, the government launched the National Solar Mission with a target of 20 GW of solar power by 2022. This target was later increased to 100 GW by 2022.

In recent years, the Indian government has announced a number of measures to promote solar manufacturing in the country. These measures include:

1. Production-Linked Incentive Scheme: The Indian government has launched a Production-Linked Incentive (PLI) scheme for the solar manufacturing industry, which offers financial incentives to manufacturers who produce high-efficiency solar modules.
2. Modified Special Incentive Package Scheme: The government has also launched the Modified Special Incentive Package Scheme (M-SIPS) to promote the manufacture of electronic components, including solar cells and modules.
3. Phased Manufacturing Programme: The Indian government has also introduced a Phased Manufacturing