The plan is expected to be presented to the cabinet for approval within the next few months. — Bloomberg
MUMBAI: India is finalising a US$1bil capital subsidy plan to bolster its solar manufacturing industry, as part of a wider effort to reduce dependence on China and profit from the global energy transition.
The proposal has been made by the New and Renewable Energy Ministry and will target domestic makers of wafers and ingots, one of the weakest segments of the country’s solar industry, according to the people, who asked not to be identified as the discussions are private.
The plan has the backing of the top advisers in Prime Minister Narendra Modi’s government and is expected to be presented to the cabinet for approval within the next few months, the people said.
A spokesperson for the ministry did not immediately respond to a request for comment. India is heavily reliant on China for imports of solar equipment, a risk to the nation’s energy security.
While India has grown its domestic modules and cell making segments, wafers and ingots manufacturing still stand at just 2 gigawatts of capacity, built by Adani Enterprises Ltd.
India has just over 71 gigawatts of modules and nearly 11 gigawatts of cells capacity, according to BloombergNEF.
The proposed subsidy plan hopes to replicate the success of India’s mobile phone manufacturing industry, the people said.
Modi’s government has spent billions of dollars in incentives to lure companies like Apple Inc and Samsung Electronics Co to set up manufacturing plants in the South Asian country.
Apple’s iPhone exports from India have grown sharply since then.
In the solar sector, logistics and quality controls contribute to the high cost of making wafers and ingots, and the subsidies should help ease that, the people said.
Even if India were to expand its wafer and ingot capacity, it would still need to rely on foreign suppliers for the raw material they’re made from: polysilicon.
India doesn’t have any capacity to produce the ultra-refined material, according to BloombergNEF data.
China dominates global manufacturing, with the capacity to produce 2.3 million tonnes a year, well ahead of No. 2 Germany with 75,000 tonnes. — Bloomberg
