The incentive program that was being considered by MNRE to support the Indian domestic solar manufacturers will not be moving forward. With the solar sector in India largely dependent on imports of solar cells and modules, domestic manufacturers were eagerly awaiting the announcement of a special incentive package or program to help their growth within the sector.
No program or package focusing on solar manufacturing has been approved, stated Mr. Piyush Goyal, Minister for Power, in the Lok Sabha.
This a blow to indigenous solar manufacturing which is marred by hurdles in access to financing and lack of capital for research and development. Mercom had previously reported, that manufacturers were hoping for some kind of subsidy or incentive from the government to scale up production, but were disappointed that the current budget did not provide any.
According to Mercom’s Manufacturing Tracker, installed capacity of domestic solar cells and modules in the country is estimated to be 2,815 MW and 8,008 MW respectively, while operational capacity of solar cells and modules is 1,448 MW and 5,246 MW respectively as of December, 2016.
The only respite for indigenous solar manufacturers is the Modified Special Incentive Package Program (M-SIPS), which provides 20-25 percent capital subsidy and other tax incentives for companies manufacturing electronic goods (which PV falls under). So far, none of the applicants seem to have been approved under this program.