Manufacturers Body Questions Center on Usage of Domestic Solar Cells in KUSUM Program

The Solar Energy Equipment Manufacturers Association of Telangana (SEEMAT) has written a letter to the Minister of Power R.K. Singh requesting the withdrawal of “the irrational and impractical decision of mandatory usage of the indigenous solar cells in the KUSUM program”. The letter has been directed to the Prime Minister’s Office.

A three-page letter dated July 26, 2019, states that the KUSUM program is a great project for supporting the farmers of our country through the usage of solar energy as a tool. This will improve the income level of farmers and reduce the distress in the farming community.

However, SEEMAT mentions that despite being a “great idea” on the part of the government, the program shouldn’t suffer due to the lack of knowledge of ground realities and understanding regarding the difficulties in its implementation.

According to the letter, the guidelines issued to implement KUSUM program is an example of how this program can suffer very badly due to the orders issued to make use of the indigenous solar cells mandatory in the program.

The association has argued that through KUSUM program, the government aims at achieving 28.55 GW of solar power by 2022, which means that the solar cell requirement to implement the program will be around 10 GW per year.


Total Solar Cell Capacity Required to Execute KUSUM Program

The communique further elaborates that the installed solar module capacity in the country is more than 10 GW. The periodic addition of solar module manufacturing capacity is mostly by the MSME (Micro, Small and Medium Enterprises) manufacturers as solar module manufacturing needs smaller investment compared to cells. The solar cell capacity in India as per the recent Ministry of New and Renewable Energy (MNRE) data is not more than 3 GW, and the operational capacity is just about 1.6 GW according to the letter. New capacity additions are not coming in as cell manufacturing is highly capital intensive, and only large manufacturers can afford to bring in the investment needed.

So, if the usage of indigenous solar cells is made compulsory, the module manufacturers do not have the capacity to source cells of 10 GW target per year, according to SEEMAT.

The solar module manufacturing capacity in India is higher than the cell manufacturing capacity. Solar module manufacturers with smaller capacities from the MSME sector have no option of participating in the KUSUM program and will have to close their module manufacturing units due to lack of domestic solar cell supply. The association has also expressed its displeasure on the MNRE’s decision to make indigenous solar cells mandatory in the rooftop program.

SEEMAT has requested the government to understand the ground realities and remove the mandate of using indigenous solar cells from the specifications of solar pumps from the guidelines of the KUSUM program and rooftop programs of the MNRE.

Instead, the association suggests, the government consider a staggered implementation of indigenous solar cells starting a year after the program of 10,000 MW of ground-mounted solar power projects is implemented.

The General Secretary of SEEMAT, Pavankumar Siddhi, told Mercom, “This case can be compared to the government insisting everyone to shift to electric vehicles immediately, even if our country does not have the capacity. The second point is why is the MNRE only insisting on indigenous solar cells to be used, why are they not asking for glass, EVA, back sheet and junction box to be indigenous too, as they are easy to manufacture and require lower investment. We have objections on the forceful addition of indigenous solar cells when we do not have sufficient capacity available indigenously.”

The government needs to be careful when implementing the domestic content requirement for programs to ensure it doesn’t run afoul of WTO norms.

Recently, the Central Electronics Limited (CEL), a public-sector enterprise of the central government, invited an Expression of Interest for the empanelment of manufactures of solar water pumps in tenders under the KUSUM program.

Last month, the MNRE issued detailed guidelines to implement the KUSUM program for India’s farmers to solarize agriculture.

Solar power is one of the most versatile forms of energy, with boundless potential and can be a game-changer for the agricultural sector, saving precious water resources, reducing dependency on the grid, and even becoming an additional revenue stream for farmers.