By FY2027, India's solar cell manufacturing capacity will surge from 8 GW as of March 31, 2024, to 60 GW. With this, India will emerge as a surplus market for solar modules amidst global module demand of 40-50 GW per annum. In view of this, the Indian domestic companies should aggressively explore export markets.

Why has the manufacturing capacity of solar surged in India?

Indeed, the manufacturing capacity of solar in India has grown based on various parameters. First of all, the Production-Linked Incentive scheme rolled out by the Indian government is expected to reach INR 550 billion, plus capex support for wafer and polysilicon capacity. Considering the above CAPEX of INR320 crore and INR120 crore from the CareEdge Ratings report, the industry for solar equipment is to see a CAPEX of almost INR1bn. The debt financing is expected to reach near to INR 700 billion in the next 3-5 years.

Capacity for solar modules in the country is expanding at an incredible rate, and as of March 2024, India's module and cell capacity stood at 70 GW-50 GW high-efficiency module capacity-and 8 GW, respectively. By September 2024, the capacity in the Approved List of Module Models and Manufacturers-ALMM-I-reached 60 GW, though most of the projects are at a ramp-up stage. The increased pipeline capacity could result in domestic cell capacity reaching 60 GW by FY2027.

What does this growth of solar manufacturing capacity in India imply for the global solar market?

This growth in the country's solar manufacturing capacity strengthened not only India's position in the global solar market but also created new business avenues for domestic players. This increased capacity will see India emerge as a major exporter of solar equipment in the world market while providing more options for localization in domestic solar projects.

What are the other current challenges and opportunities for the growth of solar capacity in India?

Therefore, in the current wave of global energy transition, the solar PV industry in India is at the front line of challenges and opportunities. Currently, India is committed to developing a more autonomous solar supply chain by decreasing its reliance on external suppliers, particularly China. The transition has not been smooth, as the slow update pace of technologies and complex dynamics in global trade have been acting against the goals of localization in India. However, Indian solar manufacturers are trying to catch up with the pace of global technology, though they are still lagging.

While the development of India's PV industry has been overshadowed by the uncertainty of policies and the challenges in financing, the opening of a window of opportunity could be opened by rapidly increasing global demand for clean energy. Indian government support, competitiveness enhancement, and technological advancement: these three factors are leading the take-off of the Indian photovoltaic industry. Meanwhile, international cooperation is deepening steadily, painting a bright picture of Indian photovoltaic industry prospects in the future.

At this juncture, the solar photovoltaic industry is facing a host of challenges and opportunities. However, guided by policies, promoted by the market, and accompanied by technological breakthroughs, India is expected to realize a greener, self-sufficient future in solar energy.