Solar Cell Manufacturers Rally in Support of Domestic Cell Usage in KUSUM Program

The association has argued the case made by Solar Energy Equipment Manufacturers Association of Telangana that called for a rollback of the mandatory use of solar cells in the KUSUM program

August 29, 2019


In a letter addressed to the Ministry of New and Renewable Energy’s (MNRE), the Indian Solar Manufacturers Association (ISMA), has expressed its support to the government’s decision to utilize indigenous cells and modules in the implementation of the KUSUM program.

The KUSUM program is expected to help Indian farmers by providing them financial and water security through the mobilization of solar projects and solar-powered water pumps. The program mandates the use of India-manufactured cells and modules for the planned 25.75 GW of solar capacity to be deployed by 2022.

According to ISMA, KUSUM is a ‘bold’ measure that will give impetus to Indian solar cells and module manufacturers as it would achieve the following:

  • Reduce reliance on China to achieve targets laid out in the renewable energy program
  • Create a manufacturing ecosystem of solar products down the value chain.

In the letter, ISMA also criticized the recent letter to the ministry written by the Solar Energy Equipment Manufacturers Association of Telangana’s (SEEMAT) requesting to roll back the mandatory use of Indian manufactured cells in the program. In its letter, SEEMAT had mentioned that despite being a “great idea” on the part of the government, the program shouldn’t suffer due to the lack of knowledge of ground realities and understanding regarding the difficulties in its implementation.

ISMA has underlined that SEEMAT was wrong in stating that 28.75 GW of solar cell manufacturing will be required to meet targets of KUSUM. According to ISMA, out of 28.75 GW, 10 GW of solar pumps do not mandate the use of domestic cells. This leaves only 15.75 GW of domestic solar cell requirement.

Further, ISMA argued that the investment in manufacturing could only happen when there is some visible demand which can be generated through policy implementation and tenders.

Dhruv Sharma of Jupiter Solar, one the oldest cell manufacturers to have invested in India, told Mercom that Make in India initiatives for solar cells and modules are boosting investment in manufacturing in the solar industry. Sharma added, “Demand visibility through the mechanism of DCR (domestic content requirement) for cells and modules is a very potent and effective instrument to rapidly increase investments in domestic manufacturing capacities. Within a few months of the announcement of the KUSUM and CPSU programs, several existing manufacturers have announced capacity expansion plans. We estimate that domestic cell manufacturing capacity will increase to 6 GW through 2020. We hope that there is no let-up in the Make in India mission of the MNRE.”

Avinash Hiranandani, Managing Director, RenewSys India, also commented saying, “The KUSUM program calls for approximately 15 GW of solar cells and 20 GW of solar modules that are made in India. India doesn’t have 20 GW of solar module manufacturing capacity that can serve the KUSUM program alone, but no one opposes it. It is unfortunate that there is selective opposition only against solar cells made in India under the program. If we don’t have such programs supporting manufacturing in both Special Economic Zones (SEZs) and Domestic Tariff Areas (DTAs), how and why will the companies invest? The government is taking the right steps in announcing such programs. The cost of manufacturing cells in India is still very high, and unless we scale up the volumes, the prices can’t become competitive. The strong commitment of the government will attract investments and help scale up the capacities. Many manufacturers are on the threshold of making huge investments. However, if such programs are announced and the government is forced to retract, how will the capacities be built, and the vision of Make in India come true?”

In its letter, ISMA has also warned that if local manufacturing of cells, modules, and balance of system (BoS) is not insisted upon, the subsidization provided will be futile as the industry will still depend on Chinese products, which will further add to foreign exchange losses to the country.

The letter, with these arguments, has requested the MNRE to carry on with the KUSUM program as planned and not roll back the mandatory cell manufacturing component of the program.

Recently, the Central Electronics Limited (CEL), a public-sector enterprise of the central government, invited an Expression of Interest for the empanelment of manufactures of solar water pumps in tenders under the KUSUM program.

Last month, the MNRE issued detailed guidelines to implement the KUSUM program for India’s farmers to solarize agriculture.

Solar power is one of the most versatile forms of energy, with boundless potential and can be a game-changer for the agricultural sector, saving precious water resources, reducing dependency on the grid, and even becoming an additional revenue stream for farmers.