Should India drop the indigenous content requirement for solar cells?

With the government planning to do away with the indigenous content requirement in the photovolatic cells in the solar energy sector, industry body Ficci has said that any such move would discourage global investments in the domestic market.

(December 6, 2010) —  With the government planning to do away with the indigenous content requirement in the photovolatic cells in the solar energy sector, industry body Ficci has said that any such move would discourage global investments in the domestic market.

Photovolatic cells are used in panels to tap solar energy, which is lucrative in countries close to the equator, called “Sunbelt” countries.

The domestic cell manufacturers feel the ministry’s recent statement, which was in a section of the press, would preclude India from cashing in on the opportunity to become amanufacturing base for solar energy, the chamber said in a statement.

It said that without domestic content requirement, none of the international players would be interested in creating a manufacturing base in India.

As a result of the domestic content requirement, the Indian cell manufacturers have gone ahead and committed investments to the tune of more than USD 700 million. Thereby, increasing capacity multifold in the country, FICCI Solar Energy Task Force Chairman K Subramanya said.

Also, several leading global players are exploring the possibility of creating their manufacturing base in India and are carrying out due diligence, Ficci said.

Without domestic content requirement, none of these international players would be interested in creating a manufacturing base in India, thereby, precluding India the opportunity to become a manufacturing base for solar energy and move up the value chain by adopting best technologies in collaboration with global technology leaders, it said.

The domestic content requirement would help the country in attracting leading technology companies to establish their manufacturing base in India in a time-bound manner, Ficci said.

Therefore, Ficci has urged the ministry to engage with the industry in a dialogue before embarking on any move that would hurt the prospect of Indian solar industry and send wrong signals to the investing community.

Copyright 2010 The Press Trust of India

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