⚡ Quick Read
India’s solar cell localisation strategy has become a cornerstone of the nation’s industrial policy. Through initiatives like the Production Linked Incentive (PLI) Scheme, Basic Customs Duty (BCD), and the Approved List of Models and Manufacturers (ALMM), India has transformed from an import-dependent market into a global manufacturing powerhouse. The government’s objective is to move beyond mere assembly, fostering a fully integrated photovoltaic ecosystem that enhances energy security and attracts significant capital investment.
The scale of growth is unprecedented, with ALMM-listed module manufacturing capacity reaching nearly 190 GW and domestic solar cell production capacity hitting approximately 30 GW. However, the mandate for domestic solar cells in government-supported projects has highlighted a transition challenge. Current annual demand is estimated to exceed 50 GW, significantly outpacing effective domestic production, particularly for high-efficiency technologies like TOPCon. Furthermore, the industry remains heavily reliant on imported equipment—such as diffusion furnaces and PECVD systems—and raw materials like silicon wafers and silver paste, primarily sourced from China.
For EPC contractors and solar developers, this supply-demand mismatch creates immediate operational hurdles. The scarcity of compliant domestic cells has driven up procurement costs and extended delivery timelines. Developers are navigating a complex landscape where project economics are under pressure, and commissioning schedules are increasingly vulnerable to supply chain delays. The reliance on Chinese equipment for domestic manufacturing lines adds a layer of geopolitical risk, as export controls and high demand in China can stall the commissioning of new Indian manufacturing facilities, thereby impacting the availability of modules for downstream projects.
The industry is now bracing for the next phase of localisation, which may target wafer and ingot production. While this is a logical progression for the India renewable energy sector, it represents a significant technological leap. As India continues to refine its manufacturing policy, the balance between aggressive localisation targets and ecosystem readiness will remain a critical factor for the financial health of renewable energy projects. Stakeholders must monitor policy updates closely to mitigate risks associated with rising costs and potential project delays in the evolving Indian solar market.
Aditya Pathre is the Founder of MVApulse and covers India’s renewable energy sector, including solar, wind, battery energy storage systems (BESS), green hydrogen, transmission infrastructure, renewable energy policy and competitive bidding. His reporting focuses on project developments, market trends, government policies and energy transition across India.
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