Saturday, February 27, 2010

Transforming India to a Solar Energy Manufacturing Hub


According to "Photovoltaic World" Magazine ( 2010 March-April issue); "By 2010, India will supply nearly 40% of its own solar pv demand". This is going to be true based on the announcenment of the National Solar Mission by Govt. of India. The National Solar Mission is a major initiative of the Government of India and State Governments to promote ecologically sustainable growth while addressing India's energy security challenge. It will also constitute a major contribution by India to the global effort to meet the challenges of climate change.

Currently, the bulk of India's Solar PV industry is dependent on imports of critical raw materials and components - including silicon wafers. Transforming India into a solar energy hub would include a leadership role in low-cost, high quality solar manufacturing, including balance of system components.

One of the Mission objectives is to take a global leadership role in solar manufacturing (across the value chain) of leading edge solar technologies and target a 4-5 GW equivalent of installed capacity by 2020, including setting up of dedicated manufacturing capacities for poly silicon material to annually make about 2 GW capacity of solar cells. India already has PV module manufacturing capacity of about 700 MW, which is expected to increase in the next few years.

The present indigenous capacity to manufacture silicon material is very low, however, some plants are likely to be set up soon in public and private sector. Currently, there is no indigenous capacity/capability for solar thermal power projects; therefore new facilities will be required to manufacture concentrator collectors, receivers and other components to meet the demand for solar thermal power plants.

To achieve the installed capacity target, the Mission recommends the following:

• Local demand creation: The 20 GW plan supported with right level of incentives for solar generation coupled with large government pilot/demonstration programs will make the Indian market attractive for solar manufacturers

• Financing & Incentives: SEZ like incentives to be provided to the manufacturing parks which may include:

o Zero import duty on capital equipment, raw materials and excise duty exemption

o Low interest rate loans, priority sector lending

o Incentives under Special Incentive Package (SIPs) policy to set up integrated manufacturing plants;

(i) from poly silicon material to solar modules; and (ii) thin film based module manufacturing plants.

According to the the SIP scheme, the Department of Information Technology, there are 15 applications in the domain of solar photovoltaic, which includes cell manufacturing, (both crystalline and thin film) and poly-silicon manufacturing among others. The combined capacity projected by these 15 companies could result in the production of 8-10 GW solar power by the year 2022 which would be sufficient for meeting the Mission targets even after accounting for exports.

o It is also recommended that solar components be covered under the Bureau of Energy Efficiency's star rating programme to ensure high standards.

Similar incentives will be required for manufacture of CSP systems and their components. A Committee may be set up to formulate a policy for promotion of solar thermal manufacture in the country.

• Ease of doing business: In consultation with States, create a single window clearance mechanism for all related permissions.

• Infrastructure & ecosystem enablers: Create 2-3 large solar manufacturing tech parks consisting of manufacturing units (across the solar value chain), housing, offices, and research institutes. These will have 24x7 power and water supply and will likely need to be located near large urban centres with good linkages to ports and airports to ensure rapid access to imported raw materials and high quality engineering talent.

All the above announced policies, if implemented in the right way, can make India the Global leader in Solar industry. We all know that India had started the initiative for the first time in the world to set up a seperate Ministry for Renewable Energy movement and it is going to click in a strategic way for making the country a world leader in the industry.

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