India Could Compete With Chinese PV In Next 3 Years

• India's nameplate module manufacturing capacity grew from 18 GW in March 2022 to 38 GW in March 2023
• By FY 2026, it will likely become self-sufficient to meet its module demand with a projected 110 GW nameplate capacity
• Market is moving from poly- to mono-PERC which gives it the advantage to adapt to new technologies as HJT and TOPCon
• Government should consider expanding the scope of PLI to also include more upstream components, PV equipment machinery and ancillary components

India will achieve self-sufficiency for its solar PV module demand by FY 2026 as its nameplate module manufacturing capacity grows to 110 GW, up from 38 GW in March 2023, which is when it can focus on catering to overseas markets as a 'viable alternative to China in terms of quality and price', reads a new report by JMK Research and Analytics, and the Institute for Energy Economics and Financial Analysis (IEEFA).

The country's nameplate module manufacturing capacity more than doubled from 18 GW in March 2022 to 38 GW in March 2023. It has another 72 GW module and 52 GW cell capacity in the pipeline, according to their joint report.

Along with 110 GW nameplate module capacity, India is also likely to boast of 59 GW cell, 56 GW ingot/wafer and 38 GW polysilicon production capacity by FY 2026. It could make India the 2^nd largest PV manufacturing country after China.

The push is mainly coming from the Production Linked Incentive (PLI) scheme that's expected to mobilize 51.6 GW module and at least 27.4 GW of integrated polysilicon-to-module capacity. It will enable the development of ancillary components as glass, EVA and backsheets, locally (see India Allocates 39.6 GW PV Under PLI Tranche-II).

Other measures that are helping the PV manufacturing industry grow here include Approved List of Models and Manufacturers (ALMM), which can act as an 'absolute trade barrier' since cost differentiation between locally produced modules and those imported is 'negligible'. As of February 27, 2023, the ALMM includes over 70 domestic companies with an enlisted capacity of 22.389 GW, as per the report.

In terms of technology, India is gradually moving towards mono-PERC from polycrystalline which will also be easy for manufacturers to upgrade to other upcoming technologies as heterojunction (HJT) or TOPCon.

Indian PV exports, by value, too have grown by more than 5 times in FY 2023, compared to FY 2022. Nonetheless, the report points at some challenges the Indian PV manufacturing industry faces.

"With the Chinese government mulling restrictions on the outflow of the critical technology used in the manufacture of these upstream components, it is imperative for countries targeting integrated PV manufacturing at scale to identify alternate sources of supply for these raw materials," said the report's Co-Author and Senior Research Associate, JMK Research, Nagoor Shaik.

Among challenges that hamper India's PV manufacturing industry to scale are over-reliance on Chinese imports for upstream products as polysilicon, ingots/wafers, and the like. Report writers recommend the Indian government to also expand PLI scheme to include more upstream components, PV equipment machinery and ancillary components to create a holistic ecosystem.

Additionally, the report identifies overreliance on imports for upstream components, muted interest among domestic consumers for locally made PV products and lack of skilled manpower to install and operate the high-tech machinery as factors holding back the full potential of the industry.

Government also needs to ensure policy stability to sustain investor confidence in the PV manufacturing sector.

Complete report titled India's Photovoltaic Manufacturing Capacity Set to Surge is available for free download on JMK's website.