The Ministry of New and Renewable Energy (MNRE) is considering a new Production Linked Incentive (PLI) scheme for polysilicon manufacturing as India looks to address a major gap in its domestic solar manufacturing supply chain.
MNRE Secretary Santosh Sarangi said the proposed scheme is being examined as the government seeks to encourage investments in the upstream segment of solar manufacturing. The scheme, which was expected to be announced earlier, has been delayed as the government considers whether polysilicon should be treated as a separate industrial activity because of its chemical and refining-intensive nature.
Polysilicon Remains a Major Gap
Polysilicon is the primary raw material used to manufacture crystalline silicon solar cells and sits at the beginning of the manufacturing chain:
Polysilicon → Ingots → Wafers → Cells → Modules
While India has rapidly expanded its downstream solar manufacturing capabilities, domestic polysilicon production has not developed at a comparable pace.
Sarangi said that companies have invested in cell and module manufacturing, along with some ingot capacity, but there has been virtually no investment in domestic polysilicon manufacturing.
India currently relies heavily on imports, particularly from China, for polysilicon required by its solar manufacturing industry.
The government believes developing domestic polysilicon production will help reduce import dependence and create a more integrated solar manufacturing ecosystem.
Proposed Scheme Could Support 10 GW+ Capacity
The government has not yet disclosed the size, incentive structure or eligibility criteria of the proposed polysilicon PLI scheme.
However, Sarangi indicated that the proposed support mechanism would be designed to encourage more than 10 GW of polysilicon manufacturing capacity.
The segment also has significance beyond solar energy. High-purity polysilicon is used in the semiconductor industry, prompting the government to consider polysilicon manufacturing as an independent industrial sector rather than limiting it to the solar value chain.
India’s Solar Manufacturing Capacity Expands
India has already built substantial manufacturing capacity further downstream.
According to Sarangi, the country now has:
- 213+ GW of solar module manufacturing capacity
- 32+ GW of solar cell manufacturing capacity
- Around 100 GW of additional cell manufacturing capacity potentially coming up over the next year
- At least 80 GW of expected ingot and wafer manufacturing capacity
The government has also introduced an approved list of models and manufacturers covering ingots and wafers, aimed at strengthening domestic production across the solar value chain.
The proposed polysilicon scheme would therefore address one of the remaining major gaps at the upstream end of the industry.
Separate From Existing Solar PLI
The proposed polysilicon incentive will be separate from the existing PLI scheme for solar PV modules.
The existing programme has helped India attract investments into cell and module manufacturing and has also supported some ingot production. However, polysilicon manufacturing has remained largely absent.
The new scheme is intended to address this specific bottleneck and encourage companies to establish high-purity polysilicon production facilities in India.
RE Round-the-Clock Power Tariff Falls to ₹5.25
Separately, Sarangi highlighted developments in India’s renewable energy procurement market, stating that the latest round-the-clock (RTC) renewable energy tender conducted by SECI discovered a tariff of just ₹5.25 per unit.
The tender requires developers to provide 90% assured power availability in each time block, with solar contributing around 50% of supply during daytime hours.
The competitive tariff was lower than the government had initially expected and demonstrates the increasing ability of renewable energy developers to combine solar, wind and battery storage to deliver reliable electricity.
Sarangi said the tariff profile of the RTC project is now broadly comparable with nuclear power and noted that developers were willing to structure projects around a ₹5.25-per-unit tariff over a 25-year period.
Government Targets Lower Power Procurement Costs
MNRE is also looking at renewable energy combinations as a way to reduce electricity procurement costs for distribution companies.
Solar-wind combinations, solar-plus-storage projects and RTC renewable energy are expected to provide DISCOMs with access to cheaper and more predictable power.
The government hopes these models can bring the average power procurement cost for DISCOMs down from around ₹5.20 per unit to approximately ₹4.85 per unit.
Lower electricity costs could improve the competitiveness of Indian industries while supporting the expansion of energy-intensive sectors such as data centres.
Green Hydrogen and New Clean Fuel Markets
The government is simultaneously working to create demand for emerging green fuels.
Green ammonia is being supplied to fertiliser plants, while green hydrogen is being tested for applications in oil refineries. Pilot projects are also being developed for:
- Green methanol in shipping
- Green hydrogen in transport
- Green hydrogen in the steel sector
- Green hydrogen-based direct reduced iron production
SECI has also launched a tender for 5 lakh tonnes of green methanol, aimed at aggregating demand and encouraging the development of a domestic market for the fuel.
India Pushes Regional Clean Energy Trade
The conference also highlighted India’s growing focus on cross-border electricity trade.
Sarangi said regional energy integration would require not only physical infrastructure such as transmission lines, substations and undersea cables, but also compatible regulatory frameworks governing cross-border electricity flows.
SECI is working with Bhutan on a large solar power project, while Tata Power is also involved in efforts to expand solar cooperation with the country.
Sri Lanka’s Energy Minister Anura Karunathilake highlighted the proposed India-Sri Lanka grid interconnection, arguing that South Asian countries could benefit from a more interconnected regional electricity market.
A regional system combining India’s solar and wind resources with Bhutan’s hydropower could improve grid reliability, reduce the need for expensive backup capacity and potentially lower electricity costs.
Officials stressed that regulatory harmonisation, investment, infrastructure and mutual trust would be essential for developing a wider South Asian clean energy market.
India’s Solar Supply Chain Enters a New Phase
The proposed polysilicon PLI marks a significant shift in India’s solar manufacturing strategy.
India has already built large downstream manufacturing capacity in modules and cells, while investments in ingot and wafer production are accelerating. Bringing polysilicon manufacturing into the domestic ecosystem could help India move closer to a fully integrated solar supply chain, reducing dependence on imported upstream materials.
At the same time, falling RTC renewable tariffs, growing battery storage deployment, emerging green hydrogen markets and regional electricity cooperation indicate that India’s clean energy transition is increasingly moving beyond simply adding renewable generation capacity toward building a more integrated and reliable green energy system.
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