Renewable Energy Equipment Growth Fuels Make in India’s Energy Transition

Nitin Konde, Apoorva Bajj

Sep 26, 2024 — 3 min read

Renewable Energy Equipment Growth Fuels Make in India’s Energy Transition

After ten years, the Government of India's "Make in India" campaign has demonstrated its effectiveness in stimulating investment, encouraging creativity, and developing top-notch infrastructure to turn India into a center for manufacturing, design, and innovation. It still has a major influence on the nation's development of a strong manufacturing base for renewable energy. The government's assistance and incentive program for domestic production in the renewable energy sector is one of its main priorities. India is a major player in the renewable energy manufacturing area because its renewable energy equipment manufacturing industry is well-positioned to meet domestic demand and service the worldwide market through exports.

Pralhad Joshi, the Union Minister of New and Renewable Energy, posted on X India's #10YearsOfMakeInIndia has profited greatly from the country's renewable energy sector. "We are providing our domestic industries with all conceivable support, from PLI to VGF. Our goal is for India to become a significant global participant in the whole clean energy solutions value chain."

Policies to Boost Domestic Renewable Energy Equipment Production

The Union Government has implemented several initiatives to encourage domestic production of renewable energy equipment, including solar PV modules, cells, and upstream components like ingots, wafers, and polysilicon. In addition, the manufacturing of wind turbines, electrolysers for the creation of green hydrogen, and battery energy storage devices for utility-scale electricity storage applications are all part of these initiatives.

The government is working to support domestic production through a variety of financial, economic, and regulatory initiatives. The Production Linked Incentive (PLI) programme offers financial incentives for the establishment of fully or partially integrated manufacturing facilities for solar PV modules and upstream components. The National Green Hydrogen Mission grants incentives for the generation of green hydrogen and the manufacturing of electrolysers, in addition to Viability Gap Funding (VGF) for stationary Battery Energy Storage System projects.

A few examples of fiscal incentives include basic customs tariffs on solar PV modules, cells, and inverters imported into the country, a waiver on import duties for certain capital items needed for domestic manufacturing, and concessional customs duties on inputs used in domestic manufacturing.

Joshi has implemented policy measures through the use of regulations like the Domestic Content Requirement (DCR) in government-subsidized schemes including PM Surya Ghar: Muft Bijli Yojana, PM-KUSUM, and CPSU Scheme Phase-II. Additional policies include Quality Control Orders for solar equipment, approved lists of models and manufacturers for solar and wind technologies, and the connection of PLI amounts to local value addition.

Encouraging the Production of Solar PV

The government's efforts continue to be heavily focused on the manufacturing of solar PV. The government is dedicated to making solar PV production in India self-sufficient (Atmanirbhar) and positioning the country as a key participant in the global value chain. The PLI Scheme for High-Efficiency Solar PV Modules, which will cost INR 24,000 crores, and other governmental initiatives like the enforcement of basic customs tariffs and domestic content criteria serve as evidence of this commitment.

Due to several initiatives under the "Make in India" campaign, India's installed solar PV module production capacity has increased from 2.3 GW to over 67 GW since 2014. India can now meet both domestic and foreign demand thanks to this rise. The nation's capacity to produce solar PV modules has increased quickly; in just the last 3.5 years, it has gone from producing 8 GW in 2021 to 67 GW annually.