Domestic photovoltaic industry to get a boost with mandatory domestic content under National Solar Mission

The domestic manufacturing for photovoltaic cells and modules will get a major boost and expand the domestic industrial base if the current recommendations of the Ajay Shankar committee are accepted. The current recommendations include

• Up to 2013: mandatory use of photovoltaic cells and modules made in India for all grids connected solar power plants in Phase 1.
• 2012-2013: mandatory use of Power Conditioning Units (PCUs) made in India
• 2013-2014: review for possible extension to wafers and silicon made in India.

A meeting of the committee was held recently for consultations with developers, manufacturers, technology providers and industry associations to discuss domestic production of raw materials and components required for intensifying the industrial base in the country.

The major issues discussed at the meeting were the following

Domestic Capacity: The current capacity for manufacturing of cells is estimated at 600 MW between 15 companies but is under utilized. The capacity for modules is estimated at 1 GW, which is also under utilized. Given the size of the  National Solar MissionI, it is expected that the capacity for cells and modules would be better utilized if domestic market also provides opportunity of growth.

Considering the above, the committee, has recommended mandatory use of cells and modules manufactured in India for all grid connected solar photovoltaic power plants put up in phase 1 of the National Solar Mission (2010-2013). This would strengthen the manufacturing base in the country. Expansion of capacities is also planned by various manufacturers, which would further enhance the domestic manufacturing capabilities. (refer Table)

It is not only the capacity of cells but the reliability of cells and modules is also a consideration. As per the presentations made by various companies, the products cater to international standards and certifications such as IEC, TUV, UL, ISO, etc. Also manufacturers provide warranties in line with international norms, which is a proof of the reliability of products.

Though power-conditioning units (PCUs) are manufactured in India, still there is a need to achieve international levels in terms of efficiency. However, the manufacturing capacity in this regard can be quickly created in India. Hence, the committee recommended that it should be obligatory from 2012 that only indigenously manufactured PCUs be used in projects under the National Solar Mission

For further backward integration of manufacturing that is silicon and wafers, a review of the situation will be done and post phase 1.

Tax & Duties: Current tax and duty structures do not support domestic manufacturing as imported final products ( PV Cells and modules ) are not taxed whereas raw materials for manufacturing these have import duties. The tariff and tax regime for key components and segments is required to be changed to promote domestic manufacturing.

The final recommendations of the committee are yet to be made and would be incorporated in the guidelines for National Solar Mission.

*The capacity for 2010 is as on date of the news publication and for 2012 is as on 31st March 2012.

This clarification is being done based on comments by our visitors.

Source: SolarIndiaOnline