Finance

Solar PLI: Don’t let big players grab all benefits, industry tells Govt


The first tender took place under a budgetary allocation of Rs4,500 crore, which led to the creation of a waiting list of bidders in addition to the winners.

The Union power ministry’s decision to invite tenders afresh for the production-linked incentive (PLI) scheme for the solar sector could create monopolies as a few top players could walk away with the sops, industry sources fear.

The first tender took place under a budgetary allocation of Rs4,500 crore, which led to the creation of a waiting list of bidders in addition to the winners. The waiting list was to be cleared after an increase in the scheme’s outlay by the ministry of finance. However, after the fresh allocations of Rs 19,500 crore for FY23 under the PLI scheme, the power ministry decided to do away with the list and go for a fresh tender.

“The PLI scheme would be beneficial to the sector only if companies win projects for integrated units. It is unlikely that firms will be interested in the creation of stand-alone units for polysilicon and wafers,” said a company executive, who attended a stakeholders’ meet chaired by Union minister of power RK Singh last week. If fresh bids are invited, it could also hamper the creation of indigenous capacities for raw materials such as polysilicon and wafers, he said. These inputs can be imported sans basic customs duty, primarily from China.

Several companies also urged the minister to make available the scheme’s benefits to firms intending to set up smaller capacities also. The individual limit of 4GW capacity under the first tender must be retained for the second tender too. It is believed that the limit may be enhanced to 10 GW in the second tender, which could allow large players to avail the entire Rs19,500 crore incentives under the scheme, leaving small units high and dry.

Also, they said, the government should consider clearing the waiting list under the first tender, while it is feared that this list would now be dumped. Sources said if the government feels that the subsidy offered under the first tender – up to 50% of the project cost – was too high, it could rationalise it, but without scrapping the bucket list.

“The need of the hour is to extend the PLI benefits to a maximum number of manufacturers. We need more competition among domestic players for cost efficiencies so that we are self-sufficient in cells and module capacities,” another executive said.

“The intent of the ministry is very clear, it wants all the waitlist players to move ahead from the first tender and participate in the second tender,” officials said.

Sources said the power ministry wants to invoke a clause in the tender document that states fresh tenders can be invited if the incentives are not allocated within six months of the announcement. “So, there cannot be any legal constraint for the ministry. The only concern is (fresh tenders) will delay the entire process while many manufacturers have already started their expansion work on expectations the bucket list would be cleared,” the official said.

Under the new tender, incentives will be allocated based on higher local content in the manufacturing of 90%. Other criteria include panels should have with efficiencies higher than 23% and panels capacities over the 600-watt peak.

Out of 15 companies that applied in the first tender around 13 companies are on the waitlist including public-sector Coal India, Adani Infrastructure, Larsen and Toubro, ReNew Solar and Tata Power Solar. Others on the list are Waaree Energies, Vikram Solar, Megha Engineering & Infra, FS India Solar Ventures, Avaada Ventures, Premier Energies and Acme Eco Clean Energy.

Reliance New Energy Solar, Andhra Pradesh-based transformer manufacturer Shirdi Sai Electricals, BC Jindal Group’s Jindal India Solar Energy were selected as the beneficiaries of the PLI scheme for solar panel manufacturing based on the initial allocation of Rs4,500 crore.


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