The government is considering extending the deadline for renewable energy companies setting up solar photovoltaic (PV) module manufacturing capacities under the Production Linked Incentive (PLI) scheme, according to senior officials privy to the development.
The companies selected for the PLI had to commission their integrated or partially integrated solar module capacities by April 2026. However, progress on the ground stands at only about 20 percent, with 25.5 gigawatts (GW) commissioned out of the 130.7 GW awarded, showed data from the Ministry of New and Renewable Energy (MNRE) seen by Moneycontrol. The incentives, according to the scheme, were to be disbursed over a period of five years after commissioning the projects.
To be sure, India’s total solar module manufacturing capacity is nearly 90 GW; of this, 17.5 GW has come up under the PLI scheme. Similarly, the country now has a solar cell manufacturing capacity of 25 GW, of which 6 GW has been developed under the PLI.
“MNRE is considering extending the PLI deadline. Whether it would be extended by a year or a deadline will be given on a case-to-case basis is yet to be decided. Besides, once these modalities are finalised, MNRE will have to send the proposal to the Department for Promotion of Industry and Internal Trade (DPIIT) for its approval,” said a senior MNRE official.
Supply chain issues
One of the companies that bagged the incentives under the PLI scheme said the delays have occurred due to sluggish technology transfer and supply chain issues. “For the longest time Chinese technicians were either not given visas or there were inordinate delays. Chinese technicians are required to train our people. Some of the software used in module manufacturing units are still in their language as the machinery is directly imported from China. We need their technicians also for installation and repair of certain machines,” said a senior company executive requesting anonymity.
Supply chain issues stemmed from global disruptions, raw material price increases, and a demand-supply gap for key components such as polysilicon, ethylene vinyl acetate, backsheets, and aluminium. Last year, industry stakeholders had also flagged to the government the issue of intermittent technology transfer blockades by China. India imports almost all its ingots, wafers and polysilicon as the country lacks manufacturing capacity beyond solar modules and cells.
Another company that won the PLI called the deadline “too stringent” and demanded at least a year’s extension. The plants were to come up within three years (by April 2026) from the date of the letter of award, the executive said.
While the first PLI scheme for solar modules (tranche I) was rolled out in September 2021, a revamped version of the PLI under tranche II was launched a year later in September 2022. The bids were invited under three baskets – polysilicon-ingots-wafers-cells-modules (PWCM), ingots-wafers-cells-module (WCM), and cells-modules (CM). Solar Energy Corporation of India (SECI) was made the nodal agency for the scheme.
Companies including Reliance Industries, First Solar, Indosol Solar Pvt Ltd, Waaree Group, Avaada, JSW Group, ReNew and Grew Energy Private Ltd were selected under the PLI scheme.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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