The solar production-linked incentive (PLI) scheme will benefit 8-13% of the photovoltaic energy plant requirement till 2029-30 and aid 20 gigawatt (GW) capacity development in the next five years, says India Ratings and Research (Ind-Ra).
It estimates that the allocation of Rs 45,000 crore towards the solar modules manufacturing industry by the Ministry of New and Renewable Energy (MNRE) can benefit the sales of 20 GW from the capacity developed under the PLI scheme across the five year implementation period. The statement said it will happen assuming 100% localization (up to 30 GW in case of 65% localization). It also means sanction of the PLI facility which will benefit 4-6 GW of sales annually over five years after commissioning of the beneficiary manufacturing facilities.
The capacity to benefit under the scheme may further reduce from the stated 20 GW level in case of the plants achieve better module efficiency and temperature coefficient than the minimum requirement defined in the notification.
Moreover, India has set a target to install 280 GW of solar power plants by FY30. Out of this, about 240 GW is under pipeline or yet to be implemented. It means just 8-13% of this planned requirement is going to benefit directly from the PLI scheme till FY30 (assuming localization to be between 65% and 100%), apart from improving the domestic manufacturing capacity.
The statement said that as per an MNRE notification dated March 30, 2021, the overall extension in timelines for commissioning of solar power generation projects is limited to six months. And, solar power developers are walking on a tight rope, given that they need to commission projects well before April 1, 2022 when the 25% to 40% basic customs duty kicks in for solar cells and modules, respectively. The capacities will still have to come up based on imported modules, given that it will take time for domestic manufacturing capacities to set up.