The new financial year has begun with the government finally bringing into effect a policy that will discourage solar power project developers from relying on imported panels. The Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirement for Compulsory Registration) Order, 2019, requires module makers to submit to an inspection of their manufacturing facilities by the National Institute of Solar Energy. Being on the list as an ‘approved’ manufacturing facility certifies a company as legitimately manufacturing solar panels within its premises and not importing modules. The major advantage is eligibility to compete for the government’s tenders for its flagship solar energy programmes. This includes the recently announced PM solar rooftop scheme.
The creation of such a list was also aimed at restricting imports from China, which controls nearly 80% of the global supply, amid the downturn in diplomatic relations. India has ambitious plans of sourcing about 500 GW, nearly half its requirement of electricity, from non-fossil fuel sources by 2030. This would mean at least 280 GW from solar power by that year or at least 40 GW of solar capacity being annually added until 2030. In the last five years, this has barely crossed 13 GW though the government has claimed that the COVID-19 pandemic affected this trajectory and the country was on track to add between 25 GW-40 GW annually. The difficulty is that meeting the targets requires many more panels and component cells than India’s domestic industry can supply. In recent years, a significant fraction of India’s solar installations has been met by imports. This affects the interests of domestic panel manufacturers who have to pay the government to be certified while at the same time losing out on orders to the cheaper Chinese panels. To meet demand, the Centre, which has kept postponing the implementation of the approved list, has now decreed that this will take effect from April 1. The yardstick of success is when India meets its 2030 commitment while also ensuring that solar power is affordable to most Indians. This means that domestic manufacturers should be subject to stringent quality checks and not be allowed to compromise on cost and quality merely on nationalistic grounds. While the Indian solar industry must grow and gain a reputation for being a high quality exporter, it should not forget that this is a road with no easy shortcuts.
