Government incentivizes local development and manufacturing of renewable energy technologies

• Integrity Education, Delhi
• 23, Mar 2022

The Government has taken a number of initiatives for incentivizing local development and manufacturing of renewable energy technologies, namely:

1. Modified Special Incentive Package Scheme (M-SIPS) Scheme of Ministry of Electronics & Information Technology: The scheme mainly provides subsidy for capital expenditure – 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs. The Scheme was open to receive applications till 31st December, 2018. The Scheme inter-alia covers solar PV cells, solar PV modules, EVA, backsheet and solar glass.
2. Preference to ‘Make in India’ in Public Procurement in Renewable Energy Sector: Through implementation of ‘Public Procurement (Preference to Make in India) Order’, procurement and use of domestically manufactured solar PV modules and domestically manufactured solar inverters has been mandated for Govt/ Govt. entities.
3. Domestic Content Requirement (DCR): Under some of the current schemes of the MNRE, namely CPSU Scheme Phase-II, PM-KUSUM and Grid-connected Rooftop Solar Programme Phase-II, wherein government subsidy is given, it has been mandated to source solar PV cells and modules from domestic sources.
4. Imposition of Basic Customs Duty on import of solar PV cells & modules: The Government has announced imposition of Basic Customs Duty (BCD) on import of solar PV cells and modules with effect from 01.04.2022.
5. Production Linked Incentive (PLI) Scheme for High Efficiency Solar PV Modules: MNRE has issued the Scheme Guidelines for Production Linked Incentive Scheme ‘National Programme on High Efficiency Solar PV Modules’, with an outlay of Rs. 4,500 crores for supporting manufacturing of high efficiency solar PV modules by providing Production Linked Incentive (PLI) on sales of such solar PV modules. Letters of Award have been issued to the eligible successful bidders to the extent of funds allocated (i.e. the present scheme outlay of Rs. 4,500 crore). An additional outlay of Rs 19,500 crore has been announced in the Budget 2022- 23 on 1st February 2022.
6. Incentives to domestic manufacturing in Wind sector: Government has put in place a system of Revised List of Models and Manufacturers, and only equipment manufactured by manufacturers in the list is allowed to be used for Wind Energy Projects. It also mandates that Hub and Nacelle assembly / manufacturing facility shall be in India. More than 70 percent of the equipment is manufactured in India.
7. ‘Renewable Energy Research and Technology Development Programme’ of Ministry of New & Renewable Energy (MNRE): The Ministry of New & Renewable Energy (MNRE) supports a scheme “Renewable Energy Research and Technology Development Programme” through various research institutions and industry to enable indigenous technology development and manufacture of new and renewable energy in the country. MNRE encourages research and technology development proposals in collaboration with the industry and provides upto 100% financial support to Government/non-profit research organizations and upto 50-70% to Industry, Start-ups, Private Institutes, Entrepreneurs and Manufacturing units. An amount of Rs. 62.47 crore has been spent in the last three years for this scheme.

This information was given by Shri R.K Singh, Union Minister for Power and New and Renewable Energy in a written reply in Rajya Sabha today.

Sources : PIB