Context
Recently the Ministry of New and Renewable Energy (MNRE) reimposed its mandate requiring solar projects to source (photovoltaic [PV]) modules exclusively from a government-approved list of domestic manufacturers starting April 1.
About
- The ALMM (Approved List of Model Manufacturers)
- Issued by the MNRE in 2021, it mandates all government-assisted or related solar projects to apply only enlisted modules, successfully barring the countryge of imported modules in maximum projects.
- The order aims to enhance energy security by reducing import dependence.
- The order was reimposed recently due to the fact the enlisted potential of around 50 GW is assumed to be sufficient and the duty-free import of solar modules from ASEAN countries is negative to domestic producers.
- The Production Linked Incentive (PLI) scheme for solar PV modules: Till now, the MNRE has announced incentives for 48.3 GW of module production capacities under the PLI scheme.
Implications of Market Concentration in India’s Solar PV Module Industry
- Positive:
- The BCD (Basic Custom Duty of 40% on solar module imports) will help develop the consumption demand of locally manufactured products.
- Manufacturers assume a multifold boom in solar panel installations due to the PM-Surya Ghar Muft Bijli Yojana’s aim of putting in one crore family rooftop solar panels.
- Furthermore, solar panel producers are also hoping for a policy exchange in European countries at the lines of America which may additionally open the European market for India.
- Negative:
- Companies linked to only 5 producers control almost half of the current capacity listed at the ALMM.
- Domestic solar modules are now 90% more pricey than imports, with expenses attaining 18 cents per watt compared to 9.1 cents for imported modules.
India’s Renewable Energy Prospects
- Current situation:
- It needs to be stated that India is the 3rd biggest electricity consuming country and stands 4th for total renewable energy capacity.
- As of (May) 2024, India’s renewable strength capacity stands at 195.01 GW with solar energy capacity of 85.47 GW, wind energy of 46.65 GW, small hydro energy of 5 GW and large hydro power of around 46 GW.
- At COP26 India announced its plan to acquire the goal of 500GW of non-fossil fuel- based energy by 2030.
Future projections
- India’s strength intake is growing at around 10%-12% per annum resulting in an additional energy demand of 20-25 GW annually.
- This increasing demand blended with the government projects can also create a multi fold increase within the demand for solar installations.
Challenges
- In order to attain the 2030 target, India desires to add about forty four GW yearly, requiring an investment of US$ 190-215 billion over seven years.
- According to the Ministry of Commerce & Industry statistics, the whole solar capacity established in FY 24 was around 15 GW this way.
- Land acquisition and infrastructure development to establish an efficient transmission community are the most important demanding situations that the industry and the government need to cope with.
- India’s per capita energy intake is only around one third of the global common.
Source: The Indian Express