Exemption of export led green hydrogen projects from solar shortlist to cut cost

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Last Updated06/09/2024

The exemption for green hydrogen projects set up in special economic zones (SEZs) or export oriented units (EOUs) by 2030

The Ministry of New and Renewable Energy (MNRE) has granted an exemption to export-oriented green hydrogen projects from its domestic solar module list, enabling them to lower production costs to compete with grey hydrogen.
This move aims to bolster India's green hydrogen exports by reducing costs through the use of cheaper imported solar modules, essential for powering electrolysers used in green hydrogen production.

The exemption, granted in May 2023, applies to green hydrogen projects set up in Special Economic Zones (SEZs) or Export-Oriented Units (EOUs) by 2030.
These projects are exempt from the MNRE’s Approved List of Models and Manufacturers (ALMM), which requires most solar projects in India to source modules from domestic manufacturers.
Importing solar modules, which are significantly cheaper than domestic ones, can substantially reduce the costs of green hydrogen production, enhancing its competitiveness in global markets.

Reducing the cost of green hydrogen is crucial to expanding demand, especially for exports where global interest is growing.
The ability to import cheaper solar modules will help lower green hydrogen prices, making it more competitive against grey hydrogen, which is produced using carbon-intensive methods from natural gas and remains the preferred choice for cost-sensitive industries like steel and refining.
In June 2024, imported solar modules were priced at 9.1 cents per watt (CIF basis), while domestic modules cost 18 cents per watt, more than double the price. By allowing green hydrogen projects to use imported modules, production costs can be cut substantially.

Despite the exemption, MNRE Secretary Bhupinder S Bhalla expressed confidence that the exemption would not negatively impact the domestic solar module industry.

India is targeting the production of 5 million metric tons (MMT) of green hydrogen per annum by 2030. Currently, projects totaling 7.5 MMT have already been announced.
India consumes about 5 MMT of grey hydrogen annually, and by 2030, the majority of domestic demand is expected to shift towards green hydrogen. Although exports are the primary focus, domestic demand is also being stimulated.

The MNRE has introduced several measures to support green hydrogen production:
SIGHT Programme: Rs 17,490 crore allocated for electrolyser manufacturing and green hydrogen capacity.
R&D Funding: Rs 400 crore allocated for research and development, with over 400 proposals received.
Regulatory Exemptions: Green hydrogen projects are exempt from prior environmental clearance and benefit from waived transmission charges for 25 years post-commissioning.
Standardization Efforts: Over 100 recommendations for green hydrogen standards have been made, with 73 already notified by regulatory bodies, including the Bureau of Indian Standards (BIS).