State-run BHEL plans to invest up to Rs 2,000 crore for setting up solar equipment manufacturing facility having a capacity of 600 MW.
BHEL, grappling with persisting headwinds in the power sector, is betting on business diversification spread across various areas including solar energy and defence sectors.
"Initial investment could be around Rs 500-600 crore and then when we (can) expand it. (Overall investment) can go up to Rs 2,000 crore for a 600 MW capacity," BHEL Chairman and Managing Director B P Rao said.
Bhel's move to foray into solar equipment manufacturing comes at a time when the import of cheap solar gears, especially from China, as well as overcapacity are hurting the Indian players.
"Initially, we are going to concentrate on the module production, which is the end product. Later, we will manufacture solar cells and (other) materials," Rao said.
The state-run power equipment major would also get into manufacturing silicon wafer, solar cell and solar module.
Meanwhile, the company is pitching for safeguard duty on imported solar equipment to protect domestic makers from cheap imports.
Ministry of Heavy Industries and Public Enterprises, the parent of BHEL, is expected to take up the same with the Ministry of New and Renewable Energy.
According to BHEL, solar equipment from some countries are coming into India at prices lower than their market value. Currently, there is no customs duty on imported solar power equipment.
On the other hand, power sector woes -- including fuel scarcity, financial constraints and environmental hurdles are adversely impacting the business prospects of BHEL.
The company has an existing order book of Rs 1.30 lakh crore.