Indian credit ratings, research and risk analytics company Crisil expects domestically manufactured solar cells to account for half of India’s total demand in fiscal year 2026–27, which runs from 1 April 2026 to 31 March 2027, up from about one-fourth in the previous fiscal year.
The outlook is based on capacity expansion plans announced by domestic solar module and cell manufacturers, supported by policy measures aimed at reducing reliance on imports and accelerating local manufacturing.
The increase in domestic share is expected to be driven by the government’s push for localization, alongside a sharp ramp-up in solar cell manufacturing capacity. However, rapid capacity additions could pressure utilization rates and realizations, potentially extending payback periods for manufacturers.
The projections factor in India’s policy framework, including the Approved List of Models and Manufacturers (ALMM) introduced by the Ministry of New and Renewable Energy (MNRE), which was later extended upstream through the Approved List of Cell Manufacturers (ALCM) to reduce dependence on imported solar cells.
Ministry of New and Renewable Energy implemented ALMM from 1 April 2024. The ALCM framework is expected to become mandatory from June 2026 for utility-scale projects with bid submissions after 31 August 2025, and for net-metering and open-access projects commissioned after 1 June 2026. Residential rooftop solar under the PM Surya Ghar: Muft Bijli Yojana is exempt until 31 March 2027.
“The ALCM will sharply reset India’s solar cell supply mix. Domestic supply will gain share and meet around half of the 60–65 GW demand this fiscal, with imports making up the rest,” said Manish Gupta, deputy chief ratings officer at Crisil.
According to the report, demand for locally made cells will be driven by new utility-scale bids, net-metering and open-access projects, and government-backed programmes such as the Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM). Imports will largely serve the pipeline of already bid-out utility-scale projects submitted before the 31 August 2025 cut-off. As that pipeline is completed, import dependence is expected to decline materially from the following fiscal year.
With rising demand and policy support, manufacturers are investing in new solar cell capacity. Crisil expects India’s cumulative solar cell manufacturing capacity to nearly double to 60 GW by the end of fiscal 2026–27, with further additions likely thereafter. The rapid buildout, however, could weigh on project returns.
“The surge in solar cell capacity will redraw project economics. Capacities commissioned by the end of this fiscal could see payback periods stretch by 1–2 years, compared with the 4–5 years seen for early movers integrating backward into solar cell manufacturing,” said Ankit Hakhu, director at Crisil.
He added that early integrated players benefited from higher premiums and utilisation rates of 50–60% after stabilisation, advantages that are expected to narrow as additional capacity comes online.
Payback timelines are increasingly important in the sector given rapid technology shifts, which can shorten asset life cycles, particularly where imported inputs add margin volatility.
Crisil also noted that manufacturers moving further upstream into ingot and wafer production—segments currently heavily import-dependent—could see improved returns once the government implements the proposed ALMM-III framework for ingots and wafers, expected from June 2028.
A key risk remains delays in power purchase agreement signings, which could weaken near-term solar module demand. The MNRE has also formed an expert committee to review exemption requests under the ALCM framework for certain net-metering and open-access projects where modules have already been installed or where developers have made substantial progress. Any material exemptions could affect demand for domestically produced solar cells.
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