A subsidy scheme for promoting solar power equipment manufacturing is awaiting approval of the finance ministry while another one that offers assured power offtake to manufacturers is embroiled in World Trade Organisation (WTO) regulations, reported Business Standard citing source.
Officials said a Rs 160 billion capital subsidy was available to domestic and foreign players to set up end-to-end solar power equipment manufacturing in India. Under the M-SIPS scheme, the subsidy is to be disbursed after the setting up of the facility. The industry, however, has sought an upfront subsidy and interest subvention.
Ministry officials said they had received several representations from industry bodies and these were being studied. Every part of the supply chain has expressed its opinion. These are being evaluated. But sanction of the subsidy is in hands of the expenditure department of the finance ministry, an official said to BS.
The MNRE launched another scheme last year assuring power offtake to manufacturers setting up facilities via a bidding mechanism. The government has invited industry feedback on the policy. However, recently the WTO raised questions on the bidding process.
The industry has another set of concerns about the scheme. A power developer said tariff-based bidding would hurt the sector as lower than market prices would not support large-scale manufacturing.
India will see 7,670 MW of solar power projects being tendered in the next two months through competitive bidding. Solar power tariffs have been falling constantly and touched a record low of Rs 2.44 per unit last year. It went up slightly in an auction held in Gujarat to the range of Rs 2.65-3.36 per unit.
