The Indian government has issued a stern warning to solar power developers, cautioning them against violating norms that require the use of domestic solar modules in projects funded under government schemes. The Ministry of New and Renewable Energy (MNRE) reaffirmed its commitment to enforce these domestic content requirements and outlined the penalties for non-compliance, including potential criminal charges under IPC 420. Developers could also face blacklisting for a period of 10 years, and disciplinary action might be taken against relevant public sector undertakings or government agencies. These requirements were introduced in 2018 to promote domestic production and employment by mandating a specific percentage of a product’s value to be sourced from local producers.
Under various schemes of the MNRE, such as the CPSU Scheme Phase-II, PM-KUSUM, and grid-connected Rooftop Solar Programme Phase-II, where government subsidies are provided, it is mandatory to source solar photovoltaic cells and modules from domestic producers. The government has introduced a series of measures to reduce reliance on cheaper imports and boost the domestic manufacturing of solar modules, cells, and related products, like wafers.
One significant initiative is the production-linked incentive (PLI) scheme for modules, cells, and related products, which has been allocated to various companies. The government has also imposed basic customs duties on imports of modules and cells to discourage imports and boost demand for local products.
Despite these efforts, the reliance on imported modules and cells continues due to a lack of local supplies. To address supply shortages, the government has exempted ongoing solar projects from mandatory procurement requirements from the Approved List of Models and Manufacturers (ALMM) until March 31, 2024.
India is striving to reach a cumulative installed solar power capacity of 292 GW by 2030, which is a significant increase from the current 67 GW. The demand for modules and cells is expected to grow to achieve this ambitious target.
In the April-June quarter of FY24, India’s solar cell and module imports increased by 55.1% to $926.6 million. While the country aims to promote domestic manufacturing, it continues to depend on imported solar components to meet its growing renewable energy needs.
