Updated: Feb 25, 2025 01:59:21pm
India Plans $1 Billion Subsidy to Boost Solar Manufacturing
New Delhi, Feb 25 (KNN) India is finalising a USD 1 billion capital subsidy plan to strengthen its solar manufacturing sector, aiming to reduce its reliance on China and capitalise on the global shift toward renewable energy, sources familiar with the matter revealed.
The initiative, spearheaded by the Ministry of New and Renewable Energy, focuses on domestic production of wafers and ingots—key components in solar panels—where India currently lags.
The plan has gained support from top advisers in Prime Minister Narendra Modi’s office and is expected to be presented to the cabinet in the coming months.
India’s solar sector remains heavily dependent on China for critical imports, posing a potential risk to energy security. While India has made significant progress in producing solar modules and cells, its wafer and ingot capacity stands at just 2 gigawatts, primarily driven by Adani Enterprises Ltd.
In contrast, India boasts over 71 gigawatts of module capacity and nearly 11 gigawatts for cells, according to BloombergNEF.
The proposed subsidy aims to replicate the success of India’s mobile phone manufacturing boom, where incentives attracted global giants like Apple Inc. and Samsung Electronics Co., leading to a sharp rise in iPhone exports.
High logistics costs and stringent quality controls have made wafer and ingot production expensive in India. The subsidy is expected to ease these challenges, making local manufacturing more competitive.
However, India still faces hurdles. Even with expanded capacity, it would rely on foreign suppliers for polysilicon, the ultra-refined raw material essential for wafers and ingots.
China dominates polysilicon production, with a capacity of 2.3 million tonnes annually, far outpacing Germany’s 75,000 tonnes.
The Indian government’s push reflects a broader strategy to build a self-reliant clean energy ecosystem while securing its position in the global renewable energy market.
(KNN Bureau)