Solar Panel Manufacturing

In News

• The Union budget increased allocation for the Production-linked incentive (PLI) scheme for high-efficiency solar modules.

What is  a Solar Panel

•  A solar panel is a collection of photovoltaic (PV) cells that collect sunlight and convert it into electric current.

Working:

• When sunlight hits the semiconductor in the solar PV cell the energy from the light in the form of photons is absorbed.
• This energy absorption results in exciting a number of electrons, which then drift freely in the cell. 
• The solar cell is specifically designed to create an electric field. This electric field forces the  electrons to flow in a certain direction- towards the  electrical terminals that line the cell.
•  This flow is known as an energy current, and the strength of the current is determined by how much electricity each cell can produce. Once the  electrons reach terminals  the current is then directed into wires making the panel a source of electrical energy.

Manufacturing in India:

• From less than 10 MW in 2010, India has added significant PV capacity over the past decade, achieving over 50 GW by 2022 .
• By 2030, India is targeting about 500 GW of renewable energy deployment, out of which ~280 GW is expected from solar PV. This calls for 30 GW of solar capacity every year until 2030.
• India’s current solar module manufacturing capacity is limited to around 15 GW per year rest is met through imports.
• An estimated 85 per cent of this import need is met by three countries  China, alongside Vietnam and Malaysia. The value of solar imported since 2014 adds up to $12.93 billion, or Rs 90,000 crore.

Challenges for Manufacturing in India:

• Solar cell manufacturing is a complicated process that is technology intensive. Establishing state-of-the-art manufacturing facilities needs access to technology. It is unlikely that companies that have spent millions of dollars on R&D would make it easy for India to access the latest technologies easily or at a lower cost.
• Solar cell manufacturing needs a huge amount of capital .The cost of debt in India (11%) is highest in the Asia-Pacific region, while in China it is about 5%.
• Solar cell technology sees upgrades every 8-10 months making manufacturing inefficient for new entrants.
• Lack of an integrated set-up and the economies of scale (despite 100 per cent FDI in the renewable energy sector) translates into higher cost of domestic production
• Solar panel Manufacturing suffers from a huge  raw material supply crunch. Silicon wafer, the most expensive raw material in the panel, is not manufactured in India.

Govt. initiatives

• The UnionGovernment established a Rs 19,500-crore production linked incentive (PLI) scheme on ‘national programme on high efficiency solar PV modules’, seeking to attract Rs 94,000-crore investment in the sector.
• To address the shortages on the raw material side with respect to silicon wafers ,the Centre has decided to provide uniform fiscal support of 50 per cent of the project cost for setting up of semiconductor fabrication plants.
• Modified Special Incentive Package Scheme (M-SIPS) of Ministry of Electronics & Information Technology offers a 20-25 per cent subsidy for investments in capital expenditure for setting up a manufacturing facility
• The government has mandated that a solar power producer should compulsorily source a certain percentage of solar cells and modules from local manufacturers, in order to be able to benefit from the government guarantee to purchase the energy produced.

Source: TH