India’s solar module capacity surpassed 100 GW DC, driven by government schemes and strong domestic demand
Domestic capacity growth outpaces annual installations, raising potential oversupply risks as exports slow with the US policy changes
Solar cell capacity remains constrained at 26 GW at present, but with ALMM-II, it is estimated to expand to 115 GW DC by FY27
India’s solar module manufacturing capacity has crossed 100 GW DC, reflecting rapid growth fueled by government schemes and robust domestic demand. Yet, the market may face oversupply pressures as the capacity expands to an estimated 190 GW DC by FY2027, as the US policy changes take effect, leading to reduced scope for exports, cautions a new SBICAPS report.
Thanks to the Approved List of Models and Manufacturers (ALMM) List-I, India’s solar module production capacity surged from 2.3 GW in 2014 to 100 GW in August 2025 (see India Hits 100 GW Domestic Solar PV Manufacturing Milestone).
However, the domestic module capacity is far greater than the annual solar additions in India, which increased by 60% year-on-year (YoY) in FY25 to 24 GW, requiring only 50 GW DC of modules. In Q1 FY26, India added 11 GW of solar capacity, its highest ever, as per SBICAPS. The country is likely to add around 40 GW annually to meet the estimated capacity by FY30.
In contrast, in FY25, Indian solar manufacturers exported just 4 GW, largely due to shifts in the US market. With exports slowing and the US reducing solar incentives under the OBBBA, Indian producers may struggle to find enough overseas demand for their growing supply.
Manufacturers interested in the US market have the other route open, that of establishing onshore facilities in the North American nation. Yet, it is easier said than done. Among the current big announcements for US solar manufacturing by Indian players, Navitas Solar, Saatvik Solar and Premier Energies have put their plans on hold, while Vikram Solar is yet to make any investment, according to the SBICAPS report (see Premier Energies’ Q1 FY26 Revenues Grow By Over 12% QoQ).
Waaree Energies is the only Indian manufacturer that is operating in the US from its 1.6 GW module factory (see Waaree’s 1.6 GW US Solar Module Manufacturing Fab Commissioned).
As for the domestic market, 70% of the module consumption is being met locally out of the 30 GW expected in FY25, led by Waaree Energies. Imports are still coming in from China for the remaining facilities that do not require ALMM modules.
Compared to modules, India’s current solar cell capacity is 26 GW DC, which is why the SBICAPS analysts call the ALMM List-II for solar cells a ‘boon’, as it mandates all new solar energy projects with a bid submission deadline of after August 31, 2025, to use modules using only listed cells. It will also be mandatory for net metering or open access projects. The list will officially come into force on June 1, 2026. The Ministry of New and Renewable Energy (MNRE) recently said it has more than 13 GW of cell capacity in the initial list (see India Enlists 13 GW Solar Cell Capacity Under Initial ALMM List-II).
Planned capacity expansions aim for near self-sufficiency, as India’s solar cell manufacturing capacity reaches around 115 GW DC by FY27. In the near term, though, higher prices for domestic content requirement (DCR) cells may temporarily raise project costs, observe the analysts.
Even as the country boosts its solar module and cell production capacity, further vertical integration remains limited. “The target to achieve nearly 40 GW wafer capacity by Mar’27 is admirable, but on ground movements to meet the lofty target seems moderate,” reads the report. “The Chinese action to shutdown nearly a third of its polysilicon capacity makes the case stronger for more domestic facilities, though no capacity exists presently.”
Further up, SBICAPS believes that India is currently unprepared for an ALMM for wafers/ingots.
The report writers call India’s attempt to include polysilicon manufacturing under the Production Linked Incentive (PLI) scheme a ‘novel’ attempt globally, as it incentivizes full integration from polysilicon to module. This will shield manufacturers from volatile polysilicon prices that affect most globally integrated wafer-to-module players.
Overall, the SBICAPS report sees vertically integrated Indian solar players as better placed than their global peers over the medium term, thanks to their ability to manage costs better and benefit from tight cell supply-demand conditions. Standalone module makers may face more variable returns, leading many to diversify into areas like inverters, IPPs, and battery storage.
In an earlier report, SBICAPS projected the country to add up to 90 GW solar PV capacity by FY 2027, led by rooftop solar. It also forecast the nameplate annual solar module manufacturing capacity to rise to reach 150 GW to 160 GW (see SBICAPS Forecasts Up To 90 GW New Solar Additions For India By FY2027).