Tranche II of Production-Linked Incentive Program for Solar Modules Gets Cabinet Nod

Tranche II will have an outlay of ₹195 billion


The Union Cabinet has approved the Ministry of New & Renewable Energy’s (MNRE) proposal for the implementation of the second phase (Tranche II) of the Production Linked Incentive (PLI) program to achieve gigawatt-scale manufacturing of high-efficiency solar photovoltaic modules.

In April 2021, the government approved the implementation of the PLI program with an outlay of ₹45 billion (~$605 million), which then increased to ₹195 billion (~$2.61 billion) in the 2022 budget.

Solar module manufacturers will be selected through a transparent selection process. PLI will be disbursed for five years post-commissioning of solar module manufacturing plants. Sales of high-efficiency solar modules from the domestic market will be incentivized.

It is estimated that about 65 GW of manufacturing capacity of fully and partially integrated solar modules would be installed yearly, reducing approximately ₹1.37 trillion (~$17.13 billion) worth of solar imports. The project will also bring a direct investment of around ₹940 billion (~$11.75 billion).

The program also seeks to create manufacturing capacity for the balance of materials like EVA, Solar glass, and backsheet.

The program is expected to generate 195,000 direct and 780,000 indirect jobs.

In November 2020, the central government approved the PLI program for ten critical sectors to enhance India’s manufacturing capabilities and exports under the Atmanirbhar Bharat initiative.

The government said it would allocate ₹1.45 trillion (~$19.61 billion) for the ten critical sectors over five years. These critical sectors include high-efficiency solar modules, advanced chemistry cell (ACC) batteries, and automobiles and auto components.

Following the approval for the PLI program, IREDA invited bids to set up 10 GW of high-efficiency solar module manufacturing capacities in May 2021. The tender received a strong response from the bidders and was oversubscribed by 5.48 times. Bidders quoted a total capacity of 54.8 GW for polysilicon, ingot-wafer, cell, and module manufacturing.

Last November, IREDA announced the list of successful bidders. Reliance New Energy Solar’s PLI award amount was increased to ₹19.17 billion (~$254.24 million) from the earlier ₹11.90 billion (~$160 million) for a capacity of 4 GW. Shirdi Sai Electricals was awarded a PLI of ₹18.75 billion (~$252 million), for a capacity of 4 GW.

Adani Infrastructure was awarded a PLI of ₹6.63 billion (~$87.93 million) out of the total quoted amount of ₹36 billion (~$477.44 million) for a capacity of 737 MW under the bucket filling method.