The incentives will be rolled out for a specified period to ensure that investment by the enterprises in the solar sector reaches a satisfactory level. Speaking at a conference, AN Srivastava, director of the federal solar program at the Ministry, said that the Ministry of Renewable Energy has recommended soft loans at 5% interest. Soft loans are below-market rate of interest. These loans will be available to manufacturing units producing smaller components and do not fall in the provisions of capital subsidy.
Recommendations
The Ministry’s recommendations suggest that equipment manufacturers based out of special economic zones (SEZs) could benefit from capital grants and equity participation up to 20%. For those not located in SEZs, above 25% extension on countervailing duties has been recommended.
According to Amitabh Kumar Gupta, managing director at Kolkata based Synergy Renewable Energy (P) Ltd, a mid-sized renewable energy manufacturer, “The financial aspect of the renewable energy sector has always been a cause of concern. As banks are not much knowledgeable about the prospects of the solar sector, securing finance is a tough endeavour. While the overall energy sector saw elaborate schemes of investment being drawn up, the renewable energy segment has lagged behind considerably. While no one previously attempted to bring in any change, fortunately now the Ministry of Renewable Energy is taking the initiative.”
Mr Srivastava stressed that the Ministry has proposed to boost solar equipment manufacturing capacity ranging between 4,000-5,000 MW within the year 2022, alongside 2,000 MW production capacity of poly silicon. The solar power programme is keen on adding 20,000 MW of solar power capacity to its grid by 2020 and aims to create a large domestic manufacturing base.
Priyanka Roy Chowdhury |
The renewable energy sector in India is lagging behind when pitted against their global counterparts. In a bid to help the solar sector reach its true potential, the Ministry of Renewable Energy intends to roll out fiscal incentives that are aimed to boost the local manufacturing of solar power equipment. 
