Union Budget 2022: Solar PLI scheme corpus grows over five times to Rs 19,500 crore

To facilitate domestic manufacturing for the goal of 280 giga-watt (GW) of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for the production linked incentive (PLI) for solar manufacturing was announced in the Union Budget for FY23. The scheme was initially allocated Rs 4,500 crore. To provide a boost to the domestic supply source to the solar industry — which is 80% dependent on imports — basic customs duties (BCD) of 40% and 25% on solar module and cell imports, respectively, have also been imposed from the beginning of FY23. Although these steps are seen to encourage local production, it may also result in higher product costs which will ultimately translate into higher electricity tariffs.