Solar Manufacturing Schemes Face Hurdles Over Subsidy, WTO Rules

Solar Manufacturing Schemes Face Hurdles Over Subsidy, WTO Rules

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.

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.

“The process of disbursal of the capital subsidy is complex and based on the reimbursement principle. To encourage effective participation, the capital subsidy should be disbursed upfront against a bank guarantee of the same amount,” the Solar Power Developers’ Association has said in a representation to the ministry of new and renewable energy (MNRE).

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. Read More

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