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Solar P.V.L.: Do not allow big players to take advantage of all the benefits; the industry warns the government

The Union power ministry’s decision to call tenders in the context of the producer-linked incentive (P.L.I.) scheme in the solar industry could lead to Monopolies as some of the leading players could win the sops, sources in the industry worry.
The first auction took place in the allocated budget of around Rs.4,500 crore, which resulted in the creation of an auction list and the winning bidders. This list of bidders was supposed to be cleared following an increment in the money allocated to the scheme by the finance ministry. After the new allocation of $ 19,500 crore in FY23 under the P.L.I. program, ministers of power decided not to go from the list and instead go for a tender.

“The P.L.I. scheme would benefit the industry only if firms win projects that integrate units. The odds are not that companies will be interested in creating stand-alone units that deal with wafers and polysilicon,” an executive of a company who attended a stakeholder meeting chaired by the Minister of power for the Union RK Singh last week. He stated that if bids for new tenders are sought and rejected, it may hinder the development of local capacities for raw materials, such as wafers and polysilicon. These inputs can be imported without duties on customs, most notably from China.

Several companies also asked the minister to provide the scheme’s benefits to companies planning to establish smaller capacities as well. The limit of 4GW for each capacity for the first tender should also remain in place for the following tender. It is thought that the limit could be raised to 10GW during the second auction, which would allow big players to take advantage of the natural incentive of Rs19,500 crore in the scheme while leaving smaller units afloat.

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Additionally, they suggested that the government could think about clearing the waiting lists for the first tender, and it is believed that the list could be eliminated. Sources told us that If the government believes that the subsidy offered in the first tender, which is as much as 50 percent of the cost, was insufficient and insufficient, it can rationalize it, but not without removing the bucket list.
“The most urgent requirement is expanding the P.L.I. benefits to the maximum number of producers. We require more competition among local players to improve cost efficiency to be self-sufficient in cells and modules,” another executive said.
“The purpose for the Ministry is simple; it would like everyone on the waitlist to be able to proceed from the first tender and take part in the second auction,” officials said.

Sources have said that the power ministry is planning to use a provision within the tender document stating that new tenders are possible if incentives aren’t given within six months of the announcement. “So there aren’t any legal restrictions on the ministry. The only issue is that (fresh tenders) can delay the entire process. In contrast, many companies have already begun expanding activities in the hope that the bucket list will be removed,” the official said.

The new tender incentives will be according to the higher local content within the manufacturing of 90 percent. Other criteria are that panels must achieve efficiencies greater than 23% and have capacities exceeding 600 watts peak.

Of the 15 companies that participated in the tender for the first time, 13 are waiting for approval, including the public sector Coal India, Adani Infrastructure, Larsen and Toubro, ReNew Solar, and Tata Power Solar. Other listed companies include Waaree Energies, Vikram Solar, Megha Engineering & Infra, FS India Solar Ventures, Avada Ventures, Premier Energies, and Acme Eco Clean Energy.
Reliance New Energy Solar, Andhra Pradesh-based transformer producer Shirdi Sai Electricals, and BC Jindal Group’s Jindal India Solar Energy were selected as recipients from the P.L.I. scheme for producing solar panels Based on an initial budget of Rs4,500 crore.