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India Announces 1,300 MW Solar Projects To Support Domestic Manufacturers

Close on the heels of announcing Ultra Mega Solar Power projects of 21,000 MW, The Cabinet Committee on Economic Affairs (India) has approved another scheme for installation of 1,000 MW of grid-connected solar power projects by Public Sector Undertakings (PSU) and government organisations.

This capacity is planned to come up during 2015–2018, and will be supported using a “Viability Gap Funding” (VGF) which is expected to cost the state exchequer Rs10 billion ($160 million). VGF support will be made available to the Ministry of New and Renewable Energy from the National Clean Energy Fund operated by Ministry of Finance.

Indian flag

The Cabinet also gave its approval for setting up over 300 MW of grid-connected solar PV power projects by defence establishments and paramilitary forces in the country. This will again draw funds from the NCEF, to the tune of Rs7.50 billion ($120 million).

Both of these schemes have a mandatory clause for using domestically manufactured PV cells and modules and have been drafted to help the domestic manufacturers who have time and again raised concerns over underpriced Chinese panels. Increasing the manufacturing base of solar power is one of the stated objectives of India’s National Solar Mission.

Not wanting to disturb the growth trajectory of solar power, and due to concerns over the US dragging India to the WTO, the Indian government had earlier decided to not proceed with solar dumping duties against a host of countries (including the US). However, at the time, Piyush Goyal (India’s Minister of Energy) was quoted as saying, “We will ensure domestic manufacturers are taken care of. I make a public assurance that the government won’t be found wanting in picking up whatever you produce.”

As WTO rules do not apply to a nation’s defense and government programs, India decided to adopt this route to support and nurture its domestic solar manufacturing industry. Consequently, PSUs such as NTPC, NHPC, CIL, Indian Railways, and also the Defense sector have announced some big projects during the recent period.

Currently, India is in the process of amending its electricity laws to promote renewable energy.

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Written By

is a Fellow with The Energy and Resources Institute (TERI, New Delhi). He tweets at @indiasolarpost. Views and opinion if any, are his own.


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