Govt plans to give 'deemed distribution license' to push solar manufacturing: Power minister

Singh said India will have 90 GW of solar equipment manufacturing capacity by 2030 (Representative image)

The government is working on a policy to give “deemed distribution licenses” to those who manufacture polysilicon for creating solar photovoltaic (PV) modules in the country, Union Power Minister RK Singh said on October 17.

The minister further said that the government will also set a timeline for phasing out low-efficiency solar PV systems so that better technology can further reduce the price of renewable energy (RE) in India.

“Our push for energy transition will continue. But one major hurdle has been supply-chain issues. Polysilicon is energy intensive so we have been thinking of ways to reduce the power cost for its manufacturing. So, now we are considering giving such manufacturers a deemed distribution license so that their energy charges taken care of," Singh said at a green energy conference organised by the Confederation of Indian Industry (CII).

Besides, we have already come out with incentives wherein such manufacturers will not have to pay any additional surcharge and the transmission charges will also be waived off. If you set up your own captive RE unit, the same shall apply. All this will help people set up their own renewable energy manufacturing capacity anywhere they want. The same will also apply to green hydrogen in the future,” he added.

The minister said that India will have 90 GW of solar equipment manufacturing capacity by 2030, up from 20GW at present. About 15-20 GW of solar equipment manufacturing capacity is currently under construction and India will have 40GW of such facilities under Production-Linked Incentive Scheme-II (PLI-II), he noted.

“Going forward, all the upcoming solar manufacturing parts will be only high efficiency cells and modules. We will have no place for low-efficiency solar cells and modules. It will be phased out. So, those who are currently making low-efficiency units in India should start transitioning really fast into high-efficiency. We will give such manufacturers with a window or a trajectory so that they have time to shift to high efficiency cells and modules,” Singh said.

The minister claimed that India will have more than 65 percent of its power generation capacity from non-fossil fuels by 2030.

As far as the global carbon load is concerned, India accounts for 3.5 percent against a population of about 17 percent of the world, whereas the developed countries account for 85 percent.

Currently, 42 percent of the India’s power generation capacity comes from non-fossils.

India’s installed non-fossil installed electricity generation capacity at present is 170GW and another 80GW is under construction, which is about 250GW.

In that context, Singh said energy storage systems are “an absolute necessity” for a country which is transitioning to renewable energy on such a large scare.

“We are going to come up with a production linked incentive (PLI) scheme for grid-scale storage system. Previous we had a PLI for battery storage, but that was the mobility sector,” he said.

“We are creating a space where independent storage comes up as an equity in our system. So you can have your own storage - battery or pumped hydro storage - and you can sell or rent out the space. So states which have surplus renewable energy during day time, they can bank it or store it with you at some storage cost and then later they can use it at night or when there’s no RE,” Singh added.

By 2030, India aims to increase its non-fossil energy capacity by 500GW, fulfil 50 percent of its energy demand with renewable energy, reduce 1 billion tonnes of CO2 and decrease carbon intensity to less than 45 percent. It further aims to achieve the target of net-zero emissions by 2070.