The effectiveness of domestic content criteria in India's Solar Mission
2013
Sahoo, Anshuman | Shrimali, Gireesh
Often, a goal of renewable energy policies is the development of domestic renewable energy technology manufacturing capacity. The Jawaharlal Nehru National Solar Mission (NSM) in India is an example; besides targeting an installation of 20GW of grid-tied solar power capacity, it includes a domestic content requirement (DCR) to strengthen a solar photovoltaic manufacturing base. We ask whether the DCR of the NSM will be effective in ensuring the global competitiveness of the beneficiary sector. Our analysis reveals three observations that indicate this outcome is unlikely: (1) the manufacturing base has become less competitive over time, (2) developers may be favoring thin-film technology, thereby bypassing the DCR, which applies specifically to crystalline silicon cells and modules and (3) gaps in the Indian innovation system are likely to prevent a return to competitiveness by solar photovoltaic manufacturers. In particular, a comparison with the Chinese innovation system indicates shortcomings in the Indian innovation system of R&D capabilities, coordination of resource provision and complementary industrial strengths. Given these observations, we suggest that policymakers remove the solar photovoltaic DCR from the NSM.
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