Officials from the ministries of finance and renewable energy as well as bankers have held several meetings over the past two months on financing-related issues faced by solar photovoltaic makers, following which the recommendations were sent by the banks.

New Delhi: The Reserve Bank is examining a recommendation from banks to include loans to
solar panel manufacturers within the priority sector lending bracket and is expected to take a decision
in the next two-three months, people familiar with the deliberations said.

“After discussion with all stakeholders, two recommendations were agreed upon. While banks have sought

tags for solar panel manufacturers, the renewable energy ministry has made a case for considering modifications in the production-linked incentive (PLI) scheme for this sector,” said an official requesting anonymity.

Officials from the ministries of finance and renewable energy as well as bankers have held several meetings over the past two months on financing-related issues faced by solar photovoltaic makers, following which the recommendations were sent by the banks.

Solar associations have argued that duty-free imports from Southeast Asian countries under free trade agreements, or FTAs, are hurting domestic manufacturers.

A bank executive said the finance ministry had asked lenders to share their inputs for the formulation of a policy to ease financing for the sector.

“The proposal to include this in priority sector lending and PLI schemes is in line with the discussion held with association members and representatives of the renewable energy ministry,” he said.

Earlier, solar associations had argued that solar exports hadn’t come down as expected.

“We have apprised the government that these could be Chinese manufacturers, who have shifted their base to these countries and are exporting from there,” said an association member, adding that as per the data they shared with the government, in the last 2-3 months, solar imports from countries with whom India has FTAs have increased by 48%.

As per report by energy think-tank Ember, solar module imports from China decreased nearly 80%, or by $2 billion in value, in first half of 2023. “This followed imposition of tariffs as India shifts away from imports to focus on building and utilising domestic manufacturing capacity. India’s domestic solar module manufacturing capacity has stepped up,” the report said.

Source – Economictimes