Government Mandates Domestic Solar Cells for Projects
The Ministry of New and Renewable Energy (MNRE) has issued a directive mandating the use of locally manufactured solar cells for all new renewable energy projects in India starting June 1st. The regulation applies to all government-subsidized projects, grid-connected solar power plants, and rooftop solar installations. The policy aims to support domestic solar manufacturers and reduce dependence on imports from China.
Previously, developers were permitted to import solar cells while manufacturing modules locally. The new rule extends domestic sourcing requirements to the cell level, creating a captive market for domestic cell fabrication plants. Developers who fail to comply with the guidelines will face the cancellation of project approvals and the withdrawal of government subsidies.
Impact on Solar Developers and Project Timelines
While the mandate has been welcomed by domestic manufacturers like Adani Solar and Tata Power Solar, it has raised concerns among project developers. Analysts suggest that domestic solar cell manufacturing capacity is currently insufficient to meet the industry’s annual demand, which could lead to supply shortages and higher project development costs. Solar developers have requested a phased implementation timeline to allow domestic manufacturing capacity to scale up.
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