The Ministry of New and Renewable Energy (MNRE) has issued a clarification stating that if diffused silicon wafer (blue wafer) is imported and is used as a raw material for the manufacture of solar photovoltaic (PV) cells, it will not qualify as domestically manufactured solar photovoltaic cells.

The clarification says that several of its flagship programs, such as Kisan Urja Suraksha Evam Utthaan Mahabhiyan (KUSUM), have the provision for mandatory use of domestically manufactured solar PV cells.

“It was seen that some manufacturers have been importing semi-processed solar PV cells (generally called blue wafer) and making final solar PV cells with little value addition in India,” states MNRE.

According to the order issued by the MNRE, a solar PV cell will be considered domestically manufactured only if it has been processed and manufactured in India using undiffused silicon wafer or black wafer, classifiable under Customs Tariff Head 3818.    

Further, the order states, “The solar PV cell manufacturing facility required to be set-up under Solar Energy Corporation of India’s (SECI) manufacturing-linked-PPA initiative should manufacture solar PV cells from undiffused wafers.”

In a letter addressed to the Ministry of New and Renewable Energy’s (MNRE) in August, the Indian Solar Manufacturers Association (ISMA), had expressed its support for the government’s decision to utilize indigenous cells and modules in the implementation of the KUSUM program. The ISMA called it a bold decision that would reduce India’s reliance on imported modules and create a domestic manufacturing ecosystem.

However, the National Solar Energy Federation of India (NSEFI), rebutted the move and expressed its concerns regarding the domestic content requirement (DCR) being mandated for the KUSUM program.

The Solar Energy Equipment Manufacturers Association of Telangana (SEEMAT) also wrote a letter in July 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 Association argued that due to lack of solar cell manufacturing capacity in the country there is no way to source 10 GW of domestic solar cells a year.

Most of the government tenders recently are being announced with the domestic content clause for solar cells and modules. But many smaller manufacturers argue that there is not enough cell manufacturing capacity to meet this demand. They stress that the government is not in tune with the realities on the ground and should allow manufacturers to first invest and build a cell manufacturing line before announcing the tenders.

Last year, the Directorate General of Trade Remedies (DGTR) recommended a 25% safeguard duty on solar cell imports from China and Malaysia for the first year, followed by a phased down approach.

Image credit: Rico Shen [CC BY-SA 4.0]