Future Bright For Indian Solar PV Manufacturing

Strong Policy Support To Lead Indian Solar Panel Production Capacity To Grow To 60 GW+ By 2025

Future Bright For Indian Solar PV Manufacturing

Indian solar PV manufacturing is growing significantly, especially supported by the government’s flagship PLI scheme, but it is important for this capacity to come online on time, says ICRA. (Illustrative Photo; Photo Credit: IM Imagery/Shutterstock.com)

  • ICRA expects Indian solar module manufacturing capacity to grow to over 60 GW by 2025 
  • It is supported by strong policies like ALMM, BCD and PLI, along with growing domestic demand 
  • It is crucial for the capacity awarded under the PLI scheme to become operational on time to reduce India’s dependence on imports 

Spurred by strong policy support and growing domestic demand, India is likely to grow its solar PV module manufacturing capacity to exceed 60 GW by 2025, up from the current level of 37 GW, with improved backward integration into cell and wafer production. 

According to the Indian credit rating agency ICRA Limited, this can be expected to further grow closer to 100 GW as capacity awarded under the Production Linked Incentive (PLI) scheme becomes operational. Under this flagship support scheme for solar PV manufacturing, the government has awarded a total of 48 GW module capacity under the 2 PLI tranches with an aggregate incentive of over INR 180 billion. 

Previously, a JMK Research & Analytics and IEEFA report pegged India to host 110 GW nameplate solar module production capacity by 2026, with a sizable presence in upstream component manufacturing of cells, ingots/wafers and polysilicon (see India Could Compete With Chinese PV In Next 3 Years).  

ICRA lists the Basic Customs Duty (BCD), Approved List of Models and Manufacturers (ALMM) and the PLI scheme as the 3 main policy support tools that India has deployed to support domestic solar manufacturers. 

Realization of the capacity awarded under the PLI on time, ICRA explains, is crucial for India to expand its domestic production capabilities that are currently largely limited to modules, to vertically integrated production and bring in local production of wafers and cells. 

ICRA analysts point out that PLI is also significant for India to lower its dependence on imported solar cells and modules. 

The market for Indian module companies is also widening beyond India, to the US especially over the last 18 months thanks to the North American country blocking Chinese modules. 

While that’s a positive for Indian manufacturers, ICRA says whether this demand remains sustainable remains to be seen as the US encourages its own domestic production of solar PV capacity through the Inflation Reduction Act (IRA). 

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews. Anu is our solar news whirlwind. At TaiyangNews she covers everything that is of importance in the world of solar power. --Email: [email protected]

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