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Mandatory Use of Local Content for Solar Projects under Jawaharlal Nehru National Solar Mission to continue in India

The mandatory use of domestic content for utility scale grid connected solar power  is a topic that has witnessed a lot of debate and there have been strong views on both for and against the same sometimes from two group companies each on one side of the same corporate house.

Panchabuta had reported recently, that the government may postpone mandatory use of locally made photovoltaic cells in solar power projects being set up under the national solar mission to speed up projects and allow access to the best-available technology although the move would be a blow to local suppliers such as Moser Baer, Tata BP Solar, KSK Surya and IndoSolar may suffer.

Just days after this, FICCI had cautioned against any move to do away with domestic content requirement in solar energy sector.

In a communication to the Secretary, Ministry of New and Renewable Energy (MNRE), FICCI, has stated that the reported statement of the Secretary in the press, viz. “We will consider mandatory clause for photovoltaic cells only after evaluating progress on projects that have been bid in the first round. If  need arises, we may postpone its implementation to allow for more global technologies to come into the Indian market,” would be detrimental to the interests of the domestic industry.  Without domestic content requirement, none of the international players would be interested in creating a manufacturing base in India. Mr. K. Subramanya, Chairman, FICCI Solar Energy Task Force “has stated that as a result of the domestic content requirement, the Indian cell manufacturers have gone ahead and committed investments to the tune of more than US$ 700 million, thereby increasing capacity multifold in the country”.

It seems like this has resulted in the ministry issuing a clarification today, that stated, “Under the Jawaharlal Nehru National Solar Mission, the Government had announced a policy to introduce domestic content wherein 30% domestic content is mandatory for the solar thermal power projects in the first phase of the Mission. Solar Photovoltaic (PV) grid power projects are to be selected in two stages. In the first stage 150 MW capacity projects are being selected, where the crystalline silicon modules should be manufactured in the country. However, for the second stage of selection of about 300 MW capacity projects, it is mandatory to use domestic solar cells and modules. There is no move to defer this policy. “

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