Solar Energy: Incentivise manufacturing

K Subramanya, CEO, Tata BP Solar

Greater interest by foreign investors translates to demands for, and greater pressure on, achieving better investment climate, more transparency in rules and procedures that affect investment. At the same time we should create atmosphere for our domestic manufacturers to be more competitive by giving proper thrust to deployment, insti­tutional and policy framework:

1. To consider providing up to 30 per cent as capital subsidy for upgrading already set up manufacturing facilities, to ramp up capacity and improve technical performance, in line with the capital subsidy support provided by some of the South East Asian countries such as China, Malaysia etc.
2. Waiver of taxes on indigenously manufactured systems for green energy. Some states impose CST or VAT to the tune of 2 per cent and 5 per cent respectively, against sales of solar PV cells /solar PV modules, solar PV system, solar collectors, solar water heating systems and other systems running and operating on solar energy. On the other hand these taxes are not applicable for imports of the same, it makes the domestic market uncompetitive.
3. Creation of a manufacturing value addition fund to support vertical integration of existing players.
4. Interest subvention for Indian companies to able to compete in the global markets.
5. JNNSM’s preference to domestic manufacturers should be extended to state solar policies as well. The policy mandates use of only domestically manufactured cell and modules for all projects under the Mission at the central level. The policy framework should also be extended to the projects under renewable energy certification by utilities and captive power generators and for decentralised solar applications. This exercise can give a boost to domestic manufacturers to yield 3-4 GW of manufacturing capacity in India and can generate large scale employment in manufacturing, instal­lation and the eco-system units.
6. Implementing Solar Purchase Obligation: RPOs should be made mandatory with a penalty clause. State Electricity Regulatory Commissions (SERCs) should be encouraged to adopt appropriate measures to ensure implementation of Solar Purchase Obligation by discoms and captive power generators. National Clean Energy Fund should be exp­anded and channeled to support discoms for honouring Solar RPOs.