India Ratings and Research estimated that the benefits from sales of 20 GW from capacity developed under the PLI scheme can come from the allocated fund of Rs 4,500 crore.
The allocation of Rs 4,500 crore towards the solar modules manufacturing industry can benefit sales of 20 GW from capacity developed under the production linked incentive (PLI) scheme, India Ratings and Research (Ind-Ra) estimates.
This estimation is based on the assumption of 100% localization which means up to 30 GW in the case of 65 percent localization. The sanction of the PLI facility will benefit 4-6 GW of sales every twelve months over five years from commissioning of the beneficiary manufacturing facilities.
PLI scheme will benefit sales up to 50% of the manufacturing capacity fixed by the winning bidder. The estimation is based assuming the base PLI rate of Rs 2.25 watt power and totally greenfield (new) expansion.
In case, plants achieve better module efficiency and temperature coefficient than the minimum requirement mentioned in the notification then the capacity benefitting under the scheme may further reduce from the stated 20GW level.
India has a target to install 280GW of solar power plants by the financial year 2030. At present, 240GW of solar power plants are yet to be implemented. The report stated that according to MNRE notification, the overall extension in timelines for the commissioning of solar power generation projects is limited to six months.
Solar power developers need to commission projects well before April 1, 2022 when the 25 or 40% basic customs duty kicks in for solar cells and modules. The domestic manufacturing capacities will take time to set up thus these capacities will have to come up based on imported modules.
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