Union Cabinet approves production-linked incentive program for solar cells and modules

The Union Cabinet has approved the Ministry of New and Renewable Energy’sproposal for the implementation of the Production Linked Incentive (PLI) program under the ‘National Program on High-Efficiency Solar Photovoltaic (PV) Modules. Further, the Cabinet set aside an outlay of Rs 45 billion for the programme, which is expected to reduce import dependence for electricity generation.

Following a competitive bidding process, the incentive will be disbursed for five years following the commissioning of the solar PV manufacturing plants. Manufacturers will be rewarded with increased PLI amount if modules are manufactured with higher efficiency and materials are sourced from the domestic market.The programme is set to create an additional 10,000 MW capacity of integrated solar PV manufacturing plants and a direct investment of Rs 172 billion in manufacturing projects. Further, it is set to create an additional demand of Rs 172 billion annually over five years for ‘balance of materials. The project is also expected to create direct employment for 30,000 individuals and indirect employment for about 120,000 people. Although the PLI program has been welcomed by stakeholders, they had sought clarity on some issues regarding the criteria for utilizing the incentives.

In November 2020, the government of India announced that it would set aside Rs 1.45 trillion for the ten critical sectors over the next five years. Some of these critical sectors include- high-efficiency solar PV modules, advanced chemistry cell (ACC) battery, and automobiles and auto components.

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