The central government’s latest announcement of installing rooftop solar panels over 10 million households has put the spotlight on India’s fast-spreading solar revolution. As the country powers its clean energy push, it has also firmly set its eyes on becoming the next manufacturing hub for solar panels after China.
India’s domestic solar photovoltaic (PV) module manufacturing capacity stands at 22 GW per annum, as enlisted in the ‘Approved List of Models and Manufacturers’ (ALMM) of the ministry of new and renewable energy. An additional 48.3 GW of fully/partially integrated solar PV module manufacturing is set to come up under the Centre’s Rs 24,000-crore PLI (production linked incentive) scheme for high efficiency solar modules.
“Indian developers are still relying a lot on imports. But this dynamic is changing with the government promoting more domestic manufacturing through PLI schemes and other non-tariff barriers like imposition of basic customs duty and companies registering under ALMM. With large corporations now committing to big GW domestic manufacturing of the supply chain, India is not far away from being self-sufficient in solar panels,” says Vibhuti Garg, director of South Asia at the Institute for Energy Economics for Financial Analysis (IEEFA).
While India is soon expected to meet its domestic demand with local production of solar modules, the main challenge is its large dependency on imports for polysilicon and other minerals that will take more time to ease.
“We are catching up fast. The PLI schemes for integrated manufacturing plants have certainly made a lot of difference and provided confidence to investors. Now, we need to deepen the value chain and go into the initial stages of manufacturing – polysilicon, wafers and more,” said Alok Kumar, former secretary at the ministry of power.
Climate goal: 280 GW solar capacity by 2030
According to experts, India is manufacturing about 14 GW of module production against the requirement of at least 30 GW per year to meet the 2030 target – to attain 500 GW of cumulative electric power installed capacity from non-fossil fuel sources. About 280 GW of it is expected to come from solar, followed by wind and other renewable sources, including biogas and hydropower.
Kumar said the main challenge is to see how fast India can grow its solar energy without increasing the import dependency. “But at the same time, we also have to strike a balance. We cannot wait till all the localisation has taken place. It will be too late, as the emissions will increase. Therefore, we need to keep marching for energy transition while scaling up our local manufacturing capacities alongside. 2030 is not the end, we need to look beyond,” he added.
India is also keen to cater to the fast-expanding export market for solar PV modules in foreign countries, which are dependent on China. “Based on PLI and upcoming additional manufacturing capacities, it is clear that we will have more than enough manufacturing capacity for solar panels in India in the next few years. How much of it will be consumed in India will eventually be determined by consumer preferences, cost considerations, regulatory preferences for local products and barriers on imports,” said Rishabh Jain, senior programme lead, Council on Energy, Environment and Water (CEEW).
The ministry has also recently mandated the procurement and use of domestically manufactured solar PV modules for government entities, as well as subsidy schemes under the National Solar Mission including the grid-connected rooftop solar programme.
New PM scheme: Fresh impetus to rooftop solar
While India is steadily expanding its solar energy capacity, its rooftop solar sector continues to lag behind. Out of the total 40 GW of rooftop solar capacity to be achieved by 2026, only 11.08 GW has been set up to date.
“At present, about 7-8 lakh households have installed rooftop solar systems and benefited from the government capital subsidy programme, resulting in about 4 GW of solar capacity. But no doubt, the residential solar rooftop sector is struggling compared to industrial and commercial installations, which pay higher electricity tariffs and are drawn to it. The residential consumers are receiving highly subsidised grid electricity and do not find it as attractive cost-wise,” said Neeraj Kuldeep, senior programme lead at CEEW.
Overall, solar energy contributes 55 percent share in the total renewable energy installation capacity in India, which reached 133.89 GW by December 2023. India has an installed solar capacity of around 72.31 GW, of which 58.53 GW comes from ground-mounted solar projects and 11.08 GW from rooftop solar capacity, while the rest 2.70 GW from off-grid solar capacity and 2.55 GW from solar components of hybrid projects.
Apart from the latest announcement for installing rooftop solar over 10 million homes, the government has also approved 50 solar parks with an aggregate capacity of around 37,490 MW in 12 states.
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