Cabinet okays ₹4.5k cr PLI scheme to boost solar equipment manufacturing

The Union Cabinet on Wednesday approved a ₹4,500 crore production-linked incentive (PLI) scheme to boost domestic manufacturing capacity of solar PV modules.

The PLI scheme is aimed at adding 10,000 MW manufacturing capacity of integrated solar PV modules entailing direct investment of ₹17,200 crore. 

The PLI scheme is likely to create direct employment of around 30,000 and indirect employment of 1.2 lakh, according to the government. 

The Cabinet, headed by Prime Minister Narendra Modi, has approved the Ministry of New & Renewable Energy's proposal for implementation of the PLI scheme 'National Programme on High Efficiency Solar PV (Photo Voltic) Modules' for achieving manufacturing capacity of Giga Watt (GW) scale in high efficiency solar PV modules with an outlay of ₹4,500 crore, an official statement said. 

Solar energy capacity addition presently depends largely upon imported solar PV cells and modules as the domestic manufacturing industry has limited operational capacities of solar PV cells and modules, it added.

The National Programme on High Efficiency Solar PV Modules will reduce import dependence in a strategic sector like electricity, the statement said adding it will also support the Aatmanirbhar Bharat initiative. 

Solar PV manufacturers will be selected through a transparent competitive bidding process.

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The PLI will be disbursed for 5 years post commissioning of solar PV manufacturing plants, on sales of high efficiency solar PV modules. 

Manufacturers will be rewarded for higher efficiencies of solar PV modules and also for sourcing their material from the domestic market. Thus, the PLI amount will increase with increased module efficiency and increased local value addition.

The government said the scheme is aimed at additional 10,000 MW capacity of integrated solar PV manufacturing plants.

This PLI scheme will see a direct investment of around ₹17,200 crore in solar PV manufacturing projects and demand of ₹17,500 crore over five years for "Balance of Materials", the statement said.

It will also help generate direct employment of about 30,000 and indirect employment for about 1,20,000 persons.

Besides, the scheme will also help in import substitution of around ₹17,500 crore every year, and will give impetus to R&D to achieve higher efficiency in solar PV modules, the government said.