MNRE, FinMin discuss capex relief for wafer, polysilicon units, Pg11

Key Highlights:

• The Ministry of Finance and MNRE are discussing a new capital subsidy scheme for the upstream solar photovoltaic (PV) manufacturing segment.
• The proposed scheme aims to support polysilicon refining, ingot, and wafer manufacturing, which face challenges due to high capital intensity and pricing pressures from China.
• India's solar PV cell manufacturing capacity is around 27 GW, while ingot and wafer manufacturing capacity is about 2 GW.
• In FY25, India imported solar PV cells, wafers, and polysilicon valued at approximately $1,641 million, $156 million, and $0.03 million, respectively.

Detailed Insights:

• The existing Production Linked Incentive (PLI) scheme for solar PV modules covers both upstream and downstream segments, but progress has been slower in upstream segments.
• MNRE is considering a capital expenditure (capex) subsidy for polysilicon and ingot-wafer projects sanctioned under the PLI scheme that have not yet taken off.
• Efforts will focus on sourcing low-cost electricity for polysilicon production, which is an electricity-intensive industry.
• The PLI scheme, launched in March 2021, aimed to install 65 GW per annum of fully and partially integrated solar PV module manufacturing capacity, with a total sanctioned outlay of Rs 24,000 crore.
• Operationalisation of PLI-awarded facilities has revealed implementation gaps, with downstream segments showing more progress than upstream segments.
• As of June 2025, the overall operational capacity achieved under the solar PLI scheme was approximately 29% of the total awarded capacity.

Key Concepts Involved:

• Polysilicon: A high-purity form of silicon used as a raw material for manufacturing solar cells and electronic devices.
• Ingot: A mass of material, typically silicon, cast into a simple shape for further processing.
• Wafer: A thin slice of semiconductor material, such as silicon, used in the fabrication of integrated circuits and solar cells.
• Production Linked Incentive (PLI) Scheme: A government scheme that provides financial incentives to boost domestic manufacturing and attract investments in specific sectors.