Government Clarifies Domestic Content Rules for Solar PV Cells

The Ministry of New and Renewable Energy (MNRE) has issued an Office Memorandum (OM) clarifying the Domestic Content Requirement (DCR) norms for solar photovoltaic (PV) cells. The OM aims to promote domestic manufacturing and ensure transparency in its schemes and programs. This memorandum was issued on March 11, 2025.

Defining Domestic Manufacturing

The memorandum clarifies that a solar PV cell (based on crystalline-silicon technology) will be considered domestically manufactured only if:

1. It is manufactured in India.
2. It is manufactured using undiffused silicon wafer (commonly known as “Black Wafer”), classified under Customs Tariff Head 3818.  
3. All steps and processes required for manufacturing the solar PV cell from the undiffused silicon wafer are carried out in India.

Imported Diffused Wafers Disqualified

The MNRE has explicitly stated that solar PV cells manufactured using imported diffused silicon wafers (commonly known as “Blue Wafer”) will not qualify as domestically manufactured for the purpose of its schemes and programs that mandate the use of domestically manufactured solar PV cells.  

However, the MNRE reiterates its stance from its May 9, 2024, office memorandum:

Thin Film Solar PV Modules manufactured in integrated factories located in India are eligible for deployment in projects under MNRE’s schemes/programmes where DCR provisions mandate domestically manufactured solar PV modules made from domestically manufactured solar PV cells.  

This clarification is intended to:

1. Provide clear guidelines to manufacturers and project developers regarding DCR compliance.
2. Promote the establishment of a robust domestic solar PV manufacturing ecosystem.
3. Ensure that government schemes incentivize genuine domestic value addition.
4. Reduce reliance on imported components, particularly diffused silicon wafers.

The new norms are expected to:

• Encourage investments in the manufacturing of undiffused silicon wafers and related processes in India.
• Shift the focus of domestic manufacturing towards more fundamental stages of the solar PV supply chain.
• Potentially impact the cost structure of solar PV projects, as manufacturers adjust to the new requirements.