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India's Solar Policies & Import Dependency



  Apr 12, 2024

India's Solar Policies & Import Dependency




What’s Happening with India’s Solar Energy Sector?

India is working hard to boost its renewable energy production, especially solar power, to meet its ambitious targets and reduce reliance on fossil fuels. Recently, the government has focused on supporting the country’s ability to make its own solar modules, which are essential parts of solar panels, through specific policies and orders.

What is the ALMM List?

The “Approved List of Models and Manufacturers of Solar Photovoltaic (PV) Modules” (ALMM) is a government-created list that includes solar module manufacturers approved for government projects and schemes. This list aims to encourage the use of domestically produced solar equipment over imports, primarily from China, which were previously bought at competitive prices.

Why was the ALMM List Re-implemented?

After a brief pause, the government decided to bring back the ALMM list to promote local solar module manufacturers. This decision was influenced by improvements in India’s manufacturing capabilities, thanks to initiatives like the Production Linked Incentive (PLI) scheme, making domestic production more competitive.

Does India Depend on Solar PV Imports?

Yes, India has heavily relied on importing solar cells and modules, mainly from China and Vietnam, to meet its solar energy requirements. However, efforts are being made to change this and boost local manufacturing.

What Policies Have Been Introduced?

India has introduced several key policies to reduce its dependence on solar PV imports:

1. The ALMM Order: It mandates using approved domestic products for government solar projects.
2. The PLI Scheme: Announced with a budget of ₹19,500 crore to increase domestic manufacturing across the solar supply chain.
3. Customs Duty: A significant customs duty on imported solar modules and cells to encourage local production.

Why is China a Leading Exporter of Solar PV?

China dominates the global solar PV manufacturing due to strategic government policies, lower industrial electricity costs, and large-scale production that has driven down costs and spurred innovation.

What’s the Potential for Solar Energy in India?

India has set a goal to achieve 500 GW of installed capacity from non-fossil fuels by 2030, with solar energy playing a key role. The country has a high potential for solar energy, estimated at 748.99 GW, which is still largely untapped. The government is actively working to harness this potential through various schemes and programs.

Conclusion

India’s steps towards increasing local sourcing of solar modules aim to strengthen its renewables manufacturing ecosystem and reduce import dependence. By focusing on domestic capabilities and introducing supportive policies, India is working towards becoming self-reliant in solar energy production and meeting its ambitious renewable energy targets.
 

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