India's solar manufacturing capacity is expected to increase by 20GW

    Electricity Minister RK Singh revealed that Indian manufacturers intend to develop more panel solar system production lines even without considering the incentive plan being developed by the government.

    Recently, Indian Electricity Minister RK Singh stated that the ministry has received a letter of intent, expressing its intention to build another 20 GW of solar module and battery manufacturing capacity in the country. The minister stated that the industry’s interest in building new factories has nothing to do with the “interest subsidy” program planned by the Ministry of New Energy and Renewable Energy (MNRE) to subsidize capital loan interest rates. Singh made this speech at the “2020 India Photovoltaic Frontier” online event organized by government think tanks NITI Aayog, MNRE and Invest India this week.

    This set of interventions that MNRE plans to take to offset high borrowing costs will reduce capital expenditures related to solar cell and silicon wafer production, as well as working capital, technology upgrades within the three-year factory life cycle, and interest on energy costs. The plan will be implemented together with tariffs applicable to solar imports.

    Incentives "Manufacturers who adopt advanced or future-oriented technologies will enjoy additional incentives," the minister said on Tuesday. "We will incorporate this into the interest subsidy program."

    NITI Aayog also proposed a production-linked Indian solar module export incentive plan. According to MNRE joint secretary Amitesh Kumar Sinha, the program will reward products with high efficiency and low heat loss, as well as encourage local production.

    India is still 64 gigawatts away from achieving its 2022 solar power generation target. Therefore, there is a huge demand for polysilicon, silicon wafers, cells and modules, at least some of which can be met by local production.

    India’s annual solar module manufacturing capacity is currently about 16 GW, of which about 9.5 to 10 GW are currently in operation. But India’s annual solar cell production capacity is only 2.5 GW.