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PIXON Thoughts on Solar Independency in India

PIXON Thoughts on Solar Independency in India


The latest Basic Customs Duty (BCD) policies have been taking a toll on the import market in the solar industry.The government started the national solar mission to become a global leader in the solar industry. On the brighter side, it is also highly contributing towards Aatmanirbhar Bharat.

Our nation is suffering from various economical challenges one of which is dependency on other nations for resources.

Countries like ours, that are dependent on oil and gas resources generally spend half of the revenue on import expenses. India ranks third in electricity consumption across the world. Yet, there are several regions in India where there is a power shortage to date.

In India, we import over 82.8% of oil and 17% of coal to meet our energy needs. So, rather than spending our capital on these resources, we have started investing in a better alternative, which is cheaper too i.e. Solar power.

The Indian Government started National Solar Mission in 2010 with a target of 20GW to promote Solar power. Later in 2015, PM Narendra Modi increased this target five folds. The original target of 20GW was achieved in 2018, four years before the deadline.

Out of the total target of 100GW of Solar installations, 40GW stands for Solar Rooftop and 60GW for Utility-Scale Solar installations.

To meet this target, the Indian government is offering subsidies (to residential customers only), schemes like “Development of Solar Parks and Ultra Mega Solar Park Scheme”, “Grid Connected Solar Rooftop Programme”, and many others.

These schemes benefit the solar companies and the subsidies, on the other hand, benefit the customers.

This also leads us to another stream of questions, in the process of shifting to a renewable alternative, are we going to hike up the import ratio of the raw materials required for manufacturing Solar systems?

To not let this happen, we need to change this chain. We need to have a self-sufficient approach towards investing in solar systems. For this, the government has taken several steps to boost the solar manufacturing industry of India.

But, are we buckling up for solar independency?

By solar independency, we mean independency from importing solar products or solar raw materials. The government has imposed various policies, one of the most recent ones is Basic Customs Duty (BCD) on Solar PV cells and Solar Modules. Ministry of New and Renewable Energy (MNRE) proposes to impose 40% BCD on Solar PV Modules and 25% BCD on Solar PV Cells w.e.f 1st April 2022.

Another rise in customs duty was reported when the budget 2021 was released. It has significantly increased from 5% to 20% for solar inverters which would ultimately increase the overall project cost by 10%. One can avoid these additional costs by choosing local manufacturers instead. These regulations will contribute towards the “Make in India” drive.

All these steps form a ray of hope for the solar manufacturers of India. Also, there are new solar companies booming the industry with high-quality products using robust technology.

But to enhance this change, to enhance this shift from import to local, the government can ease this process by offering a fullproof plan. There are numerous manufacturing industries looking up to the government to develop set norms.

This would leave no room for the buyers to look outside the country for their requirements. Once this happens, the manufacturers would automatically contribute to the Aatmanirbhar Bharat which will, in turn, help India achieve Solar Independency.

Anand Gupta Editor - EQ Int'l Media Network