India’s Growing Solar Manufacturing Capacity: Positive Future for the RE Sector

In recent years, India has made significant strides toward enhancing its solar manufacturing capabilities, thanks to a combination of expanding domestic production and proactive government measures. These developments have contributed to a positive shift in India’s solar landscape, positioning the nation as a key player in the global renewable energy sector.

Progress in Domestic Solar Manufacturing

India is steadily progressing toward self-reliance in solar cell and module manufacturing. According to estimates from Rubix, a leading analytics service provider, imports of solar cells and modules have decreased significantly. In the first 8 months of 2024-25, imports of solar cells and modules dropped by 20% and 57%, respectively. This reduction highlights the success of India’s efforts to boost local production and reduce reliance on foreign imports.

Most notably, imports from China, which historically dominated India’s solar supply chain, have seen a substantial decline. In 2023-24, the share of solar cells imported from China fell from over 90% to 56%, while module imports from China dropped from 90% to 65%. This shift demonstrates India’s growing manufacturing capabilities and a more diversified solar supply chain.

Key Players Driving the Change

Several prominent companies are at the forefront of expanding India’s solar manufacturing capacity. TP Solar (Tata Power’s solar manufacturing arm), Reliance Industries, Waaree Energies, Vikram Solar, Gautam Solar, AdSolar, and Rene are planning significant capacity expansions in the gigawatt range. These companies are positioning themselves to meet growing demand and capitalize on emerging opportunities both within India and in international markets.

The Indian government has also played a crucial role in fostering this growth. Policy changes and initiatives, such as the Production-Linked Incentive (PLI) scheme, have provided a strong incentive for local manufacturing. The PLI scheme, in particular, aims to boost domestic production by offering financial incentives to manufacturers, further reducing the need for imports and enhancing India’s competitiveness in the global market.

Solar Cells and Modules: Import Dependence and Export Growth

Despite the progress in local manufacturing, India still faces challenges in achieving complete self-sufficiency. Rubix points out that the country will continue to rely on imports for solar photovoltaic (PV) cells and wafers due to the limited capacity for domestic cell production and the absence of wafer production facilities. However, the country is making steady progress in module manufacturing, with the industry increasingly targeting export markets.

India’s solar module exports have been growing significantly, with the value of solar module exports in 2023-24 nearly 35 times greater than that of solar cell exports. Rubix highlights that large domestic players, such as Waaree Energies, Adani Solar, and Vikram Solar, have been responsible for most of India’s PV exports. Each of these companies exported over half of their annual production in FY2024. Other emerging PV manufacturers, including Grew Energy, ReNew Power, Navitas, Solex Energy, and Saatvik Energy, are also expanding their reach into international markets and building overseas supply chains.

India’s Renewable Energy Goals and Global Leadership

India’s ambitions in renewable energy extend beyond manufacturing. At COP26 in 2021, the country made a bold commitment under its “Panchamrit” pledge, which outlined five key targets aimed at combating climate change and accelerating the adoption of green energy. These targets include reaching 500 GW of non-fossil electricity capacity, generating half of all energy requirements from renewable sources, and reducing emissions by 1 billion tonnes by 2030. Furthermore, India has set a goal of reducing its emissions intensity of GDP by 45% and achieving net-zero emissions by 2070.

India’s focus on green energy aligns with the global push for sustainable solutions to climate change. With its growing solar manufacturing capacity, the country is well-positioned to contribute to the global renewable energy transition while simultaneously meeting its domestic energy needs.

Conclusion

India’s journey toward solar self-reliance is far from complete, but the progress made so far is commendable. The combination of strong government support, expanding domestic manufacturing, and a focus on export markets signals a promising future for India’s solar industry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.