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New Delhi: India’s solar manufacturers are preparing to invest about ₹30,000 crore to build about 50 GW of solar cell capacity in fiscal year FY27, racing to comply with new local-sourcing rules that take effect in June.
The expansion, led by companies including Waaree Energies, Adani Solar, Reliance Industries Ltd, ReNew Energy Global Plc, Avaada Group and Premier Energies, follows a government mandate requiring cells used in state-backed projects and power procured by distribution utilities to come from the Approved List of Models and Manufacturers. The policy is designed to curb import dependence and ensure certified technology feeds into the grid.
Industry executives expect domestic cell capacity to reach 45 GW by the end of fiscal 2026 and potentially 95 GW by the following year, based on projects under development. “By the end of the next fiscal year, with the pipeline companies have, cumulative capacity may reach 95 GW,” a person aware of the matter said. The capital expenditure required for 1 GW of solar cell manufacturing capacity is about ₹600 crore.
In the solar production chain dominated by China, silicon ingots are sliced into wafers, which are processed into cells and then assembled into modules. While India has built a successful solar module manufacturing industry, it still relies heavily on imported solar cells to make those modules. While module capacity has reached 160 GW, cell capacity stands at a far lower 30 GW.
Among India’s leading solar cell makers are Waaree, which will have an estimated capacity of 15.4 GW by FY27, Adani Solar (estimated 10 GW), Premier Industries (10.6 GW), ReNew (6.4 GW) and Avaada (6 GW).
With India aiming to add 50 GW of renewable-energy capacity annually to reach 500 GW by 2030, the new playbook is part of India’s decision to reduce reliance on Chinese supplies and develop an indigenous solar supply chain. There have also been instances of the US government investigating some solar module consignments from India citing their use of Chinese cells.
Queries emailed to Waaree, Adani Solar, Reliance Industries, ReNew and Avaada remained unanswered at the time of publishing.
Expansion plans
The industry is “totally prepared” to meet ALMM norms and expects at add 50 GW of capacity, said Vinay Rustagi, chief business officer of Premier Energies. He noted, however, that several renewable energy projects auctioned before December 2024 were exempted from the ALMM rule to ensure smooth implementation. Rustagi said Premier Energies’ cell capacity will grow from 3.6 GW at present to 10.6 GW in the next 6-7 months.
Prashant Mathur, chief executive officer of Saatvik Green Energy Ltd the company expects to commission about 2.4 GW of cell capacity at its new Odisha facility by the middle of FY27. “This will complement our module lines and firmly place us among India’s emerging, fully integrated solar manufacturers.” The ALMM rules will mark out the manufacturers from the assemblers, he said, adding Saatvik will scale capacity and deepen backward integration in the coming years.
While Adani Solar has commissioned 4 GW of cell capacity, another 4 GW is ready for commissioning and another 2 GW is expected to be commissioned by March, taking its total cell manufacturing capacity to 10 GW by the end of this fiscal.
Last year, Nasdaq-listed ReNew Energy Global Plc raised a $100 million investment from British International Investment (BII), the UK’s development finance institution and impact investor, to amp up its solar manufacturing business in India. It plans to use BII’s investment to grow the business and expand its manufacturing capacity by building a state-of-the-art 4 GW TOPCon cell facility in Dholera. Post-expansion, ReNew’s total manufacturing capacity will be about 6.4 GW of modules and 6.4 GW of cells. As of May 2025, ReNew Photovoltaics, its module manufacturing arm, had an operational 6.4 GW solar module facility in Jaipur and a 2.5 GW solar cell facility in Dholera, Gujarat.
RIL is another major player in this space, with a cell manufacturing capacity of 10 GW. Last month, it said its heterojunction-based solar cell manufacturing facility in Jamnagar had been commissioned.
Some power developers, however, have concerns over the ALMM timeline.
At the end of December 2025, Tata Power Solar was producing 3.6 GW of solar cells and this number is expected to reach 4.5 GW by the end of March 2026. (edited)
Power developers face constraints on technology readiness, said Sanjeev Aggarwal, founder and executive chairman, Hexa Climate, an independent power producer. “
We need high-efficiency options like TopCon to make modern FDRE projects viable, and domestic supply for these is still playing catch-up. Realistically, we are looking at a temporary supply squeeze and a 30-40 paise/unit tariff hike as the market absorbs the ‘green premium’ of domestic manufacturing.”
“The bigger structural risk is for the C&I (Open Access) segment. Unlike utility bids that often get ‘grandfathered’ based on bid submission, C&I projects face a hard stop based on the commissioning date. This is operationally dangerous. In our business, right of way (RoW) issues or connectivity delays are routine. If a project scheduled for May 2026 slips into June because of a farmer agitation or a transmission delay, it instantly becomes non-compliant. That regulatory cliff – where a two-week operational slip can render a project unviable – is the real concern for private investment,” he added.
China factor and other hurdles
Over the past few years, the government has supported the local solar ecosystem through the production linked incentive (PLI) scheme and high basic customs duties—40% on modules and 25% on cells. However, growth under the ₹19,500-crore PLI scheme has faltered owing to Chinese supply constraints and a lack of visas for Chinese technicians, as previously reported by Mint. The government has already extended the scheme by another year – until 2027 – and a diplomatic thaw between India and China over the past year has somewhat eased the situation.
An industry executive pointed to China’s dominance of the solar chain. “Backward integration is key, and that too will happen, but until then, supplies of wafers, ingots and polysilicon will remain dependent on China. However, the improvement in relations between the two countries bodes well for the sector. The industry will have to navigate such issues in the future, so backward integration at the earliest is key,” the executive said on the condition of anonymity.
Sankalp Gurjar, assistant professor of geopolitics and geoeconomics at Gokhale Institute of Politics and Economics, agreed on the need for localization. “The recent ease in tensions comes in the backdrop of concerns in both countries since Trump became US president. Both India and China are trying to make it a functional relationship, but structural concerns remain, and the trade deficit remains. The central problems have not been solved.” In such a situation, India will have to lower its import dependence on China in critical sectors such as solar energy, he added.
Prices of solar cells and modules surged recently as China tightened its quota for wafer exports in December 2025. India’s renewable-energy space also faces operational issues as about 43 GW of renewable power is yet to be contracted and a significant capacity of power is curtailed on a daily basis in Rajasthan and Gujarat, owing to lack of transmission capacity.
Supply glut warning
The rapid growth of module manufacturing, which largely involves assembling cells, has sparked concerns of a supply glut, with the Union ministry of new and renewable energy cautioning lenders against reckless lending. In December 2025, the Ministry of New and Renewable Energy (MNRE) said it had informed the department of financial services and lenders such as PFC, REC, and IREDA about current domestic solar manufacturing capacities. It said these financial institutions should use this data to take a well-informed approach to loan proposals. It also said lenders must expand their portfolios beyond just solar module facilities to include upstream stages—such as solar cells, ingots-wafers, and polysilicon—as well as ancillary components like solar glass and aluminium frames.
In a November report, ratings agency ICRA warned of potential industry overcapacity, as annual solar module production (60–65 GW) is expected to outpace annual installations (45–50 GW direct current). According to ICRA, India’s cell manufacturing capacity may reach 100 GW by December 2027.
Wafers and ingots next
The Indian government has also proposed bringing wafers under the ambit of ALMM by June 2028 to encourage module makers to use locally made wafers and ingots. In September 2025, Mint reported that the government planned to spend unused funds of about ₹5,500 crore under the PLI scheme on a fresh scheme to support local manufacturing of wafers and ingots. The union ministry of new and renewable energy has also been working on a scheme to support the domestic manufacturing of these two sub-components.
Currently, only Adani Solar manufactures wafers domestically, though several other companies plan to set up wafer and ingot capacity in the coming years. Tata Power’s chief executive and managing director Praveer Sinha said in November that the company planned to set up a wafer and ingot manufacturing facility with a 10 GW capacity. Tata Power Solar has a cell manufacturing capacity of 4 GW.
Vineet Mittal, chairman of Brookfield-backed Avaada Group, told Mint in an interview in September 2025 that Avaada Electro, the company’s solar module manufacturing arm, planned to start manufacturing the entire chain of solar components and equipment locally from FY28. Currently, the company produces about 8.5 GW of solar modules annually. It is developing 6 GW of solar cell manufacturing capacity that is expected to be ready in 2026, and another 6 GW may come up by the end of 2027.
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