Centre considering fund to protect domestic solar industry

Solar mission mandate to promote domestic crystalline silicon technology fails to achieve desired result

The Ministry of New and Renewable Energy is planning to create a fund to help entrepreneurs who are setting up domestically engineered solar power plants in the country. Many project developers feel the pinch while buying solar equipment from domestic manufacturers because cheaper Chinese and US solar panels are available in the market.

Under the Jawaharlal Nehru National Solar Mission (JNNSM), a project developer setting up a solar photovoltaic plant based on crystalline silicon technology will have to mandatorily buy the panels and cells from domestic manufacturers. The clause was put in the guidelines of the batch 1 and batch 2 projects of JNNSM to promote domestic industry of crystalline silicon technology. But this clause does not apply to solar photovoltaic power plants based on thinfilm technology; developers using this technology can import equipment from outside the country.

But rather than boosting domestic manufacture the mandate is driving entrepreneurs towards thinfilm technology. “Out of 28 solar photovoltaic projects in batch 1, half were based on thinfim technology, and in the batch 2, it is expected that more projects would be based on thinfilm technology,” says Tarun Kapoor, joint secretary, MNRE. This may discourage developers from buying equipment from domestic manufacturers, he adds.

Taking this into account and to protect the domestic industry, MNRE is planning to give financial aid or subsidy to project developers so that they can easily buy from domestic manufacturers.  “For example, if the cost of setting up a 1 MW solar photovoltaic plant is Rs 10 crore and the equipment comprises 70 per cent of this cost, the developer can take this money in the form of loan from this fund at a very nominal interest rate,” says Kapoor. “But the plan is only at the discussion stage now,” he clarifies.

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