Domestic Solar Panel Makers Want Government To Keep Sourcing Locally Under Kusum Scheme

Domestic solar panel makers urged the government to continue sourcing only locally-manufactured modules to power water pumps at India’s farms instead of diesel.

In a letter to Power and New and Renewable Energy Minister RK Singh, Indian Solar Manufacturers Association said they will increase investments in short term to supply solar panels to meet the demand under the government’s Kisan Urja Suraksha Evam Utthan Mahabhiyan scheme. BloombergQuint has reviewed a copy of the letter.

This comes a month after Telangana’s Solar Energy Equipment Manufacturers Association had requested power minister to withdraw the decision of indigenous use of solar cells, citing lack of capacity, online news portal Mercom reported.

Under the guidelines issued by the Ministry of New and Renewable Energy, only indigenous solar cells and panels are allowed to use under the Kusum scheme. The Rs 34,422-crore scheme aims to provide financial security to farmers, encouraging them to generate solar power in their farms and use the clean energy to replace the diesel water pumps. Under the scheme, the government plans to install 17.5 lakh agricultural pumps powered by solar energy.

According to Indian Solar Manufacturers Association, India has 3 gigawatt of solar cell manufacturing capacity, which may jump to 8-10 GW by 2020-21 and subsequently, the module manufacturing capacity may rise to more than 15 GW from 8 GW currently.

In the next 15-24 months, domestic solar panel makers, under Indian Solar Manufacturers Association, plan to increase their cell manufacturing capacity by:

• Mundra Solar: 1,000 MW
• Jupiter Solar: 250 MW
• Premier Solar: 450 MW
• Euro Multivision: 250 MW
• Renewsys: 450 MW
• Indosolar: 250 MW

However, the expansion in capacity, according to the letter, is subject to continued demand and protection from import of cells and modules at dumped prices from China, Malaysia, Vietnam and Taiwan, and financial closures from Indian banks and other financial institutions.

While import of solar cells and modules from China have declined since safeguard duty was implemented in July 2018, India still imported $1.9 billion worth of panels in the 11 months ended June 30, according to government data compiled by BloombergNEF.

The letter said a number of Chinese companies are planning to set up cells and module manufacturing units in India. They are also in talks with some domestic panel makers to form joint ventures for planned manufacturing facilities, it said.