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Pradhan Mantri Yojana for Augmenting Solar Manufacturing (PRAYAS)–What you need to know

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PRAYAS India

We at Greenworldinvestor have repeatedly said that a failure in Indian governments’ policy making has led to Chinese imports of solar panels swamping the Indian market. These imports may cross almost $2 billion this year and could reach $4-5 billion a year, if the Indian installed solar capacity achieves a run rate of 10 GW a year. The reason is that Indian solar manufacturers are an emasculated, failed lot of tiny manufacturers. Even though some of the companies such as Vikram Solar and Waaree Solar claim solar panel capacity of 500 MW, they are nothing but glorified assemblers. They don’t make most parts of the solar supply chain and do very little value add. Even worse they are not even close to being competitive with top Chinese solar panel players which have around 5000 MW of capacity spread across different countries and much better technology. There are tons of companies in India who make solar panels but all are a tiny useless lot.

Also read Could a $3.1 billion Modi’s “Prayas” boost Solar Manufacturing in India.

Even the country’s weak effort at promoting the Indian solar manufacturers in the past through Domestic content requirement (DCR) in its national solar tenders is gone. Hereon after the WTO ruled that these policies were illegal for discriminating against foreign solar panel providers. Now even the fig leaf of protection that was given to the solar manufacturers is gone and the 50-60 producers would be looking to shut down their factories.

The Indian government apparently now wants to prevent the industry from dying and has come out with a giant $3 billion package to revive the industry. The numbers look quite large and I am not sure whether the government has the funds or the intent to go through with the plan of providing so much subsidy to the Indian solar makers.

As per the news reports, the government intends to roll out the Pradhan Mantri Yojana for Augmenting Solar Manufacturing (PRAYAS) policy which aims to create a 5 GW of manufacturing capacity by 2019. I think that the government forgot its own MNRE document which says that Indian producers already have a 5 GW plus capacity just that most of it is noncompetitive and runs of low to zero utilization.

The policy details are very vague with subsidy in the range of INR 50-90 lakhs (around USD 10-15 cents watt) being bandied about for solar project tenders. I am not sure how the government will give out these tenders and how they will promote solar manufacturing. Also the policy talks only about wafers and cells and there is no mention of polysilicon manufacturing which is the most critical part of the solar supply chain and is controlled by a few manufacturers.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

2 Responses so far | Have Your Say!

  1. Vishal

    I think this scheme came because now adani is puting up solar manufacturing plant.

  2. Ashutosh Tulpule

    Hi,
    I agree with the blog above, there are 69 manufacturers of solar panels of which 2-3 are fairly large capacity , rest are name sake ( tender purpose table and chair companies) ,some have even closed down however the once which claim to be alive they are riddled by old technology and hence cannot compete, they have fudged capacities to please the government babus to get tender and never supply
    These days QA is utmost important for which certain QA agency approvals are required and are cost.

    We ourselves propose to build india’s most advance green filed solar panel manufacturing plant.