India: 36 GW Module Production Capacity

• India's module and cell annual production capacity can grow enough by the end of 2023 to suffice the national annual requirement of 30 GW installations
• JMK Research and IEEFA analysts believe counting all the expansion plans for manufacturing announced by various players, it would take module manufacturing capacity of the country to around 36 GW by 2023-end
• While government is supporting local manufacturing, analysts believe it should not just subsidize capex, but also providing opex support to manufacturers
• Domestic manufacturing companies need to have a proactive technology partnership with innovators or research institutes to be aligned with technological improvements

India's nameplate solar module production capacity as of November 2021 was around 18 GW, and cell capacity 4.3 GW, but factoring in all expansion plans announced by various manufacturers, it can grow up to 36 GW and 18 GW by 2023-end, which they believe will be able to cater to 30 GW annual PV requirement by the end of 2023.

According to estimates, India needs to install 30 GW solar annually to be able to reach 500 GW non-fossil fuel energy capacity target by 2030.

Analysts with the JMK Research & Analytics and the Institute for Energy Economics and Financial Analysis (IEEFA) make these observations in their February 2022 report titled Photovoltaic Manufacturing Outlook in India.

If the conditions are right and all plans come to fruition, India may host 51 GW of solar module and 33 GW of cell production capacity by 2025.

The report counts global solar module manufacturing capacity as 358 GW out of which China holds about 61%. India is far behind those metrics, however there are positive signs of government creating a favorable eco-system, in terms of regulatory support to encourage local vertically integrated manufacturing, including the Production Linked Incentive (PLI) scheme.

Yet, the industry continues to face mid- to long-term challenges of high manufacturing expenses, inadequate research and development (R&D) and a shortage of skilled manpower. For instance, the bulk of existing module capacity in India is still multi-Si while the mono-Si mostly comes from imports.

At the same time, the analysts point out that without large-scale domestic manufacturing of upstream PV value chain products, the overarching risks of logistics and commodity price fluctuations for imports is likely to persist.

The report calls for a sustainable and balanced PV development for the country that aligns manufacturing growth with project development. One way the government can encourage the same is through not just by subsidizing capex, but also providing opex support.

"It is also crucial to incentivize the Indian solar manufacturing industry to maintain investment in solar R&D to keep pace with rapid technology improvements. Domestic manufacturing companies need to have a proactive technology partnership with innovators or research institutes," reads the report. "Rather than focusing solely on the production output, it's imperative for the domestic solar manufacturing industry to create a strong foundation for sustainable development overall."

Complete report can be accessed on the website of JMK Research.