NEW DELHI: The Cabinet on Wednesday approved a production-linked incentive (PLI) of Rs Rs 19,500 crore for high-efficiency solar module manufacturing, a move the government said will substitute imports worth Rs 1.4 lakh crore a year and create 9,75,000 direct and indirect jobs, the government said.
This is the second tranche of incentives under the PLI scheme for solar manufacturing, announced in the 2022-23 Budget.
The government reckons the scheme would lead to direct investment of Rs 94,000 crore and facilitate building of 65,000 MW per annum manufacturing capacity of fully and partially integrated solar PV modules.
Analysts said combined with additional incentives given by states and concessions available under Customs regulations, the scheme will make Indian-made modules competitive.
“The PLI benefits coupled with incentives extended by states and concessional or deferral duty schemes in customs will help improve the internal rate of return of projects and make Indian manufactured solar modules competitive in the market,” E&Y tax partner Saurabh Agarwal said.
The government said the scheme will also encourage capacity building in peripherals such as solar glass and back sheets needed for making modules.
The module manufacturers will be selected through a transparent competitive bidding process. PLI will be disbursed for 5 years after commissioning of the manufacturing plants, on sales of high efficiency solar PV modules. Manufacturers will be rewarded for higher efficiencies of solar PV modules and also for sourcing their material from the domestic market.
India’s ambition to create a 500 gigawatt (GW) solar power capacity by 2030, though flexible, is riding on imports due to domestic capacity constraints. Domestic manufacturing capacity currently stands at 3 GW for cells and 15 GW of modules.