Empowering India’s Solar Ambitions: Ensuring Careful Adherence to Domestic Content Requirements (DCR)

Posted On - 7 November, 2023 • By - King Stubb & Kasiva

The Ministry of New and Renewable Energy (MNRE) in India is taking stricter measures to enforce compliance with domestic content prerequisites (DCR) in the country’s solar photovoltaic (PV) domain. This policy aims to enhance the production of solar cells and modules in accordance with guidelines established by the World Trade Organization (WTO).

Reaffirming Commitment

On October 16, 2023, the Indian government reiterated its unwavering commitment to the DCR policy, stressing the vital importance of following these rules. The official communiqué[1] expands on the previous memorandum dated February 20, 2018, and reiterates the strict consequences for any DCR violations.

Boosting Solar Manufacturing

The DCR policy is India’s way of spurring the growth of the local solar technology manufacturing industry. This initiative aims to reduce the country’s reliance on imported solar cells and modules, thereby promoting self-sufficiency.

Serious Consequences for Non-Compliance

MNRE’s renewed commitment to ensuring DCR compliance underscores the government’s resolve to enforce these measures. The penalties are designed to discourage any potential misuse of the policy:

  • Legal Action: Violators may face legal consequences under the Indian Penal Code, including Section 420 and related sections. These charges cover misrepresentation and the use of imported solar cells and modules in projects subject to DCR.
  • Developer Blacklisting: Developers found to have breached DCR regulations may be blacklisted for ten years, effectively barring them from participating in future MNRE initiatives and projects.
  • Seizure of Bank Guarantees: The notification empowers MNRE to confiscate any relevant bank guarantees provided by the offending party. This measure aims to compensate for any financial losses incurred due to non-compliance.
  • Disciplinary Measures: The policy calls for disciplinary action against officials from Central Public Sector Units (CPSUs) or State Governments responsible for overseeing DCR compliance.
  • Additional Steps: In addition to the measures mentioned above, MNRE retains the authority to take any other necessary actions to address violations and ensure compliance.

Addressing Recent Concerns and Reiterating Compliance

Recent concerns have been raised about suppliers of solar PV modules participating in MNRE’s initiatives and programs violating DCR requirements. In response, MNRE has underscored the importance of strict compliance. This reiteration highlights the government’s commitment to promoting local manufacturing while upholding international trade agreements.

Government Initiatives

The Indian government has introduced the Production-Linked Incentive (PLI) scheme for solar modules, cells, and related products. Recently, the government allocated a total capacity of 39.6 GW of domestic solar PV module manufacturing to 11 companies, with a total investment of ₹14,007 crores under the PLI scheme for high-efficiency solar PV modules (Tranche-II).

In the previous fiscal year, India reached 38 GW of solar module manufacturing capacity, with plans to increase it by an additional 48 GW over the next three years.

A Growing Solar Industry

India’s solar sector is experiencing rapid growth, with the goal of reaching a substantial 292 GW of solar power capacity by 2030. This expansion reflects the increasing demand for modules and cells in the solar industry.

Conclusion

MNRE’s commitment to enforcing DCR requirements reaffirmed on October 16, 2023, is essential to nurturing the growth of domestic solar manufacturing in India. As the nation works towards its renewable energy goals, adherence to these stringent measures becomes increasingly important. The government’s steadfast commitment to promoting local manufacturing while respecting international trade agreements heralds a new era of self-sufficiency and sustainability in India’s solar sector. This comprehensive policy is poised to energize India’s solar future and assist in achieving renewable energy objectives.

[1] https://cdnbbsr.s3waas.gov.in/s3716e1b8c6cd17b771da77391355749f3/uploads/2023/10/202310171791450430.pdf