Give infrastructure status to solar PV industry
The policy framework put forth by the Ministry of New and Renewable Energy (MNRE) through the Jawaharlal Nehru National Solar Mission (JNNSM) has been a monumental success. Driven by JNNSM and State policies the grid connected capacity in India will be nearly 1000 MW by March 2012 as compared to less than 40 MW two years back.
JNNSM was launched with two main objectives – To solarise India through addition of 20,000 MW by 2022 under the JNNSM; and
To have a thriving solar PV manufacturing industry by having 4000-5000 MW of annual capacity domestically by 2020. While we are well on our way to achieve the first, there is still a lot to be done to reach the second objective.
Currently, Indian solar PV manufacturing industry has close to Rs 10,000 crore invested and provides jobs to more than 25,000 employees with total installed capacity of 1150 MW of cells and 1800 MW of modules.
To boost capacity and ensure long-term viability, the industry has been in dialogue with the Government and is expecting a few measures to enable the industry to take off, making India the solar capital of the world.
Indian products are right up there competing with the best in technology and quality as of today globally.
However, in order to sustain further investments and grow the industry as planned in JNNSM, it needs to be provided with a level playing field. For that JNNSM already mandates domestic content and once the same guidelines are extended to all State programmes and technologies, the purpose would be achieved.
It will bring FDI into India, increasing capacity and enhancing employment opportunities by 10 times, as per a TERI report. In addition, this step will generate the ability to continuously absorb and deploy new technology.
We welcome global solar brands to set up their facilities in India, as it will facilitate healthy competition and will result in benefits to the end customer by reducing the cost of solar power and better returns for investors. These will also ensure that Indian tax payers’ money stays in India, rather than strengthening industry outside of India.
POTENTIAL TO CHANGE
Today, 40 per cent of Indians do not have access to electricity. Solar has the ability to power these homes given the decentralised nature of generation. It has the potential to change the energy access scenario in India, the way mobility changed the communication scenario. So, the time is ripe to further encourage the solar industry.
Removal of inverted duty structure, classifying solar PV industry as ‘infrastructure industry’, making it a priority lending sector and treating it separately from the conventional power sector are some of the broad expectations of the industry for the coming Budget.
Grid parity is the holy grail of solar industry globally. Technology advancements and scale have already brought down cost of solar power significantly in India – from nearly Rs 18 to almost half of around Rs 9 per unit (Kwhr) at farm level, in the last two years. With the conventional power costs shooting up, the Indian solar PV industry has the opportunity to achieve grid parity sooner than originally planned. To facilitate this, we have been engaged with the Government and expect to see some initiatives in the forthcoming Budget. Removal of service tax and VAT in the entire value chain and specially in solar EPC will be one of the big impact items.
In order to drive solar adoption across the country, the Budget should provide for personal income-tax benefits to individuals using solar photovoltaic in domestic use.