Global Solar Manufacturers Look to India for New Manufacturing Capacity
- May 12, 2015 6:00 pm GMT
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Over the past months, several international PV module manufacturers have announced plans to ‘Make in India’. While Trina Solar and Canadian Solar have declared that they are setting up manufacturing capacities in India, First Solar and SunEdison have stated that they are studying the viability of manufacturing capacity in India. As per BRIDGE TO INDIA’s sources; at least two other large international manufacturers are seriously considering setting up cell and manufacturing capacities in the country. As per our estimates, around 2,000 MW per year of manufacturing capacity is in the planning stages.
- Firstly the anticipated demand of solar in India is on the rise
- Secondly financial incentive of up to 25% of the capital cost of module manufacturing facilities is available under the M-SIPS
- Some of the state governments are providing further incentives for setting up solar manufacturing facilities
Several factors are attracting international interest in setting up solar manufacturing capacity in India. The most important factor, of course, is the rising anticipated demand in the country combined with India’s persistence with domestic content requirement policy for a part of the total capacity requirements. The second important factor is the availability of a financial incentive of up to 25% of the capital cost of module manufacturing facilities under the Modified Special Incentive Package Scheme (M-SIPS) of Ministry of Communications and Information Technology for applications submitted by the end of this month (May 2015). Minimum investment requirement for crystalline cell and module line is INR 1 billion (USD 15.7 m) and for thin-film line, it is INR 3 billion (USD 47.1 m). These requirements translate into a 60 MW crystalline cell and module manufacturing facility. Most international manufacturers are expected to be planning much bigger facilities of more than 200 MW each.
In addition, some state governments are providing further incentives for setting up solar manufacturing facilities. For example, Andhra Pradesh, which has one of the better policies, provides additional financial assistance of up to INR 2.5 million (USD 40,000) along with subsidy in power tariffs, exemption of stamp duty, VAT/CST tax exemption for first five years of operation and several other smaller grants and subsidies on aspects such as skill up-gradation, patent filing, certification and participation in international exhibitions. It also provides exemption from inspection under several local laws to improve the ease of doing business.
Depending on the availability of funds under the M-SIPS scheme and growth of the solar sector in India, up to 2,000 MW of module manufacturing capacity may come on stream over the next couple of years. If this capacity is globally competitive, it could be used to meet domestic demand and also cater to some export markets. But one thing is for sure – the existing manufacturers will need to up their game to compete with the new players.