Solar Strategies: DCR and Non-DCR Panels in Renewable Energy Landscapes

While there are numerous types of solar panels in the market today based on various technologies, DCR (Domestic Content Requirement) and non-DCR are comparatively new concepts related to the manufacturing origin of solar photovoltaic panels. These concepts play a significant role in the solar industry as a basis for formulating policies.

What are DCR and Non-DCR Solar Panels?

Domestic Content Requirement (DCR) solar panels are those that meet specific domestic content requirements set by governments or regulatory bodies. This policy stipulates that a certain proportion of the solar panels used in a project must be manufactured domestically, within the same country where the project is taking place. It may also involve sourcing a certain proportion of solar components, such as cells or modules, from local manufacturers. The idea is to promote local manufacturing and boost the domestic production of solar panels.

Non-Domestic Content Requirement (Non-DCR) solar panels are free from the mandate to have domestic content requirements. These panels are generally sourced from international manufacturers and do not have to meet any specific local content criteria. They are widely used in countries where there are no regulations or incentives for using DCR solar panels.

DCR solar panels are frequently utilised in government projects or incentives, whereas non-DCR solar panels are more commonly used in the private sector. DCR panels support local manufacturing and boost domestic production, while non-DCR panels can be sourced from international manufacturers.

In all other aspects, such as technology and working mechanisms, there is no significant difference between DCR and non-DCR solar panels. Both types contain photovoltaic cells that convert sunlight into electricity. In many countries, such as the United States, India, and Canada, DCR solar panels are mandated for government projects or to qualify for certain incentives. Unsurprisingly, DCR solar PV panels generally come at a higher cost compared to non-DCR panels due to domestic manufacturing requirements.

Impacts of Employing DCR or Non-DCR

The impact of using DCR versus non-DCR solar PV modules can be significant, depending on factors such as project requirements, government policies, and cost considerations. 

DCR 

DCR solar panels help support local economies, create jobs, and promote sustainable manufacturing practices. However, they may come at a higher cost due to domestic manufacturing requirements. Additionally, local production helps reduce reliance on uncertain foreign relations to meet domestic solar needs.

Furthermore, using DCR modules may help consumers avail themselves of government incentives or subsidies. However, a limited number of domestic options may restrict consumers' choices for the most suitable solar PV installation.

In India, the Ministry of New and Renewable Energy (MNRE) introduced the DCR policy to promote local manufacturing of solar components and support the 'Make in India' initiative. Under several current MNRE schemes, including CPSU Scheme Phase-II, PM-KUSUM Component B, and Grid-connected Rooftop Solar Programme Phase-II, which provide government subsidies, it is mandated to source solar PV cells and modules from domestic sources.

Non-DCR

On the other hand, non-DCR solar panels have their own merits and shortcomings. Considering that only a handful of countries can boast self-sufficiency in domestic solar manufacturing capacities, non-DCR panels are typically more widely accepted. They are available in the global market and may offer a broader range of options in terms of technology, efficiency, and price.

Since the installation of non-DCR panels involves no restrictions or preferences related to domestic manufacturing, they offer increased flexibility in choosing the most suitable solar panels for a particular project. Their cost-effectiveness and easy availability make them a perfect choice for various solar projects, including residential, commercial, and utility-scale installations.

However, in the face of global competition and better options available, the budding domestic industry may be hampered.

State of DCR Solar in India

There are numerous manufacturers worldwide whose products can enter the Indian market. However, the country’s recent measures to boost the domestic industry have led to the emergence of manufacturers fulfilling the DCR for solar modules. Some of the market leaders include Adani Solar, Waaree, Goldi Solar, Renewsys, Tata Power Solar, Vikram Solar, Jakson Group, Loom Solar, Insolation Energy, Premier Energy, Ascent Solar, Canadian Solar, GreenSun Energy, JA Solar, and Saatvik Green Energy.

To shift reliance on non-DCR solar modules, the Government of India (GoI) has been implementing policies to promote the use of DCR panels through various rules and regulations. The DCR requirements vary depending on the specific MNRE scheme or program. Generally, solar PV projects must use domestically manufactured solar modules with a minimum domestic content of 70 percent. Solar developers can also claim DCR benefits for domestically manufactured solar cells, inverters, and other components.

In the event of a DCR violation, the solar developer may face certain consequences, including blacklisting, forfeiture of bank guarantees, and even criminal prosecution. If blacklisted, the solar developer may be barred from participating in future MNRE schemes or programs for up to 10 years.

Way Ahead

India's domestic manufacturing capacity for DCR solar modules is on a significant growth trajectory, with projections indicating a capacity of 110 GW by FY 2026. This rapid expansion is crucial for positioning India as a major exporter in the industry.

Currently, China, Malaysia, Vietnam, and Cambodia are the primary sources of imports for solar PV and components in India. Between FY 2019 and FY 2023, approximately USD 11,171 million worth of solar cells and modules were imported into the country, accounting for around 0.4 percent of India's total merchandise imports during this period.

According to data from the ALMM and independent assessments by the National Institute of Solar Energy (NISE), India's installed capacity for solar PV modules was around 50 GW by the end of FY 2022-23. By the end of December 2023, the nation’s cumulative solar module manufacturing capacity had increased to 64.5 GW. While India has achieved self-sufficiency in the production of solar modules and panels, it still needs to develop substantial capacity in the production of solar cells to stand as a leader in solar exports.