Executive order on Solar panels

Context

In order to encourage the production of solar panels in India, the Ministry of New and Renewable Energy (MNRE) has recently brought an executive order starting from April 1.

About

• This order was first issued by the MNRE in 2019.
• It requires manufacturers of solar modules to voluntarily submit to an inspection of their production facilities by the National Institute of Solar Energy.
  • Modules are a couple of solar panels joined together. Solar panels are an assembly of solar cells.
• Being on the listing as a permitted production facility certifies a company as a legitimate manufacturer of solar panels and not an insignificant importer or assembler.

Voluntary nature of the list

• The major advantage of being at the listing is eligibility to compete for tenders issued by the government for its flagship solar electricity programmes.
• This includes among others the recently introduced PM Surya Ghar Muft Bijli Yojana.
  • The scheme envisages subsidising rooftop solar installations for almost one crore households in the country regarding an anticipated subsidy of ₹75,000 crore.
  • However, only domestic manufacturers, licensed as a part of the Approved Models and Manufacturers list, would be eligible.
• There is also another scheme referred to as the PM KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan).
  • It aims to offer solar pumpsets and rural electrification.
  • For manufacturers to be eligible to provide additives under this scheme, they should be certified as genuine nearby producers.
• The government also has a ₹24,000 crore scheme, called the Production Linked Incentive Scheme.
  • This is centered at incentivising domestic manufacture of solar panels and their components.
  • Eligibility for this scheme too calls for one to be a bona fide local manufacturer.

Significance

• This was essential because India’s solar industry is heavily reliant on imports of cheaper and comparable-quality solar modules from China.
• Despite being among the top manufacturers in the world and a dedication to scale solar set up four-fold by 2030, local production of those cells and modules is much below demand.
• India also has a limited capaclity to make the raw material of a cell — ingots, wafers — and is depending on imported cells.
• The introduction of the sort of list was also geared toward limiting imports from China, which controls almost 80% of the global supply.

Why is India reliant on imports?

• India has ambitious plans of sourcing about 500 GW, almost half its requirement of power, from non-fossil fuel sources by 2030.
• This could imply at least 280 GW from solar power by that year or at least 40 GW of solar potential being annually added until 2030.
• In the final 5 years, this has barely crossed 13 GW even though the government has claimed that COVID-19 affected this trajectory.
• The problem is that meeting the targets requires many more solar panels and component cells than India’s domestic industry can supply.

India’s solar production capability

• Current status

• • • It is predicted that nearly half of India’s solar modules are imported from China and the demand-supply mismatch is predicted to persist.
    • The government, however, has claimed that beginning this year there will be a vast upward push in manufacturing capacity.
    • While the list of licensed manufacturers at the Approved Models and Manufacturers (AMM) listing has grown to 82 in step with the MNRE, there is yet no list of such producers of solar cells.
    • This way that India is still far away from achieving a comfortable degree of self-reliance.

• Export state of affairs

• 2023-24 was a lucky year for Indians in the solar industry.
• China, which resources over 80% of solar components globally saw a reduction in orders from the U.S. Considering that the previous depended on forced labour by Uyghur Muslims in the Xinjiang province.
• Europe too scaled returned imports from China and a beneficiary of this was India which exported nearly $1 billion worth of modules in six months of 2023-24. 

Source: The Hindu

UPSC Mains Practice Question

Q.India has immense potential of solar energy though there are regional variations in its developments. Elaborate. (2020)

Download as PDF