Union Budget 2022: Boost to India's Solar Manufacturing
In an effort to increase local manufacturing capabilities, the government announced the Productivity Linked Incentive scheme in 14 sectors for achieving the vision of AtmaNirbhar Bharat. According to latest government reports, the schemes have received excellent response, with a potential to create 60 lakh new jobs, and an additional production of 30 lakh crore in next 5 years.
The renewable energy sector is also one of India’s champion sectors under the Make in India campaign. India has announced ambitious clean energy targets by 2030. Leading the clean energy revolution, India has announced its target to produce 500 GW of renewable energy by 2030. Therefore, in order to provide a boost to India’s renewable energy manufacturing and localise supply chains, within the 14 sectors, INR 4500 crore outlay was provided to the manufacturing of integrated solar Photo Voltaic (PV) modules.
The solar sector has been showing tremendous growth in India. In the last 7 years, India’s solar capacity has grown 17 times. The domestic manufacturing industry has annual capacities of around 2.5 GW for solar PV cells and 9-10 GW for solar PV modules. The domestic manufacturing capacity is expected to be scaled up to 10 GW capacity of integrated solar PV manufacturing plants (from manufacturing of wafer-ingot to high efficiency modules) by Q4 of 2022-23 via the phase 1 of the Production Linked Incentive (PLI) Scheme which was announced earlier. The Production Linked Incentive scheme for the solar PV sector has proved to be very successful, inviting bids from 18 players of close to 53 GW of integrated manufacturing.
Finance Minister Nirmala Sitharaman in her budget speech on February 1, 2022, announced an INR 19,500 crore outlay to boost manufacturing of solar modules under the Production Linked Incentive Scheme. The boost was given in an effort to facilitate India’s ambitious goal of 280 GW of solar installed capacity by 2030.