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India: VGF Support to Boost Domestic Manufacturing in Solar Energy

The Central government is planning to come out with a fresh solar tender that will provide viability gap funding (VGF) to projects setting up solar wafer and ingot manufacturing facilities.

 

Silicon wafers and ingots are critical components that go into manufacturing solar cells and modules.

 

However, India does not have manufacturing facilities for these complements that are largely imported from China, even by local solar cell and module makers.

 

Under the phased manufacturing plan in solar, government may provide the VGF support to developers of these critical solar components. This high technology manufacturing will change the face of domestic equipment market and eliminate dependence on imports.

 

As part of an accelerated manufacturing plan that is being operationalised in India, it is incentivising setting up of solar cell manufacturing capacity of 4,000 MW that will allow project developers to restrict import of this product completely.

 

Additionally, 3,000 MW of fresh solar cell capacity is being added under manufacturing linked bids for solar projects. This will incentivise power project developers planning manufacturing in India.

 

The current capacity of solar cell manufacturing in India is about 2,500 MW. This is proposed to rise over three times in coming years.

 

In case of solar modules as well, 7,000 MW of capacity is being added in addition to the existing capacity.

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