Tuesday, May 30, 2023
Support Our Journalism
HomeEnvironmentIndia's solar panel sector to be 'self-sufficient' by 2026, emerge as alternative...

India’s solar panel sector to be ‘self-sufficient’ by 2026, emerge as alternative to Chinese solar PV modules

A report by think tank IEEFA and research firm JMK Research says govt's production-linked incentive scheme has been a catalyst for growth of PV manufacturing ecosystem in India.

Text Size:

New Delhi: India’s solar PV (photovoltaic), or solar panel, sector is likely to reach self-sufficiency within the next three years, a new report has found, indicating it could become a viable alternative to Chinese modules that dominate the global market.

The report, published jointly Tuesday by Institute for Energy Economics and Financial Analysis (IEEFA), a US-based think tank, and JMK Research, a Gurgaon-based research and analysis firm, says India’s “nameplate” solar PV module manufacturing will reach a capacity of 110 gigawatts (GW) in 2026, at which point it will “attain self-sufficiency for its solar PV module demand”. “Nameplate” is the maximum production capacity of a facility.

The finding comes at a time when India is scaling up domestic manufacturing to achieve its goal of installing an electric power capacity of 50 per cent from non fossil sources by 2030. Solar power is projected to shoulder a bulk of this growth.

According to the report, the central government’s production-linked incentive scheme (PLI) encouraging domestic manufacturing of “high efficiency” solar PV modules “is one of the primary catalysts spurring the growth of the entire PV manufacturing ecosystem in India”.

The Ministry of New and Renewable Energy announced last week it had allocated a capacity of 48,337 megawatts (MW) of domestic solar PV modules across two tranches of its PLI scheme, with a cumulative support of more than Rs 18,500 crore.

“Besides the augmentation of infrastructure in all stages of PV manufacturing, from polysilicon to modules, it will also lead to a simultaneous development of an ancillary market,” says the report.
The potential for India to export its modules upon reaching self-sufficiency is bright, the report suggests, adding, it “must focus on expanding its reach in other global markets,” and present itself as an alternative to China “in terms of quality and price.”

India & solar PV

India’s solar cell and PV module capacity has more than doubled since 2020, the research shows. In 2020, India’s solar cell nameplate capacity stood at 3 GW, which grew to 6.6 GW by March 2023. Its solar PV module capacity, meanwhile, has grown from 15 GW to 38 GW over the same period of time.

This, the findings say, is in response to the “favourable policy environment created by the Indian government.” Apart from the PLI scheme, tariffs on solar PV imports and creating a list of approved models and manufacturers has helped motivate domestic manufacturing.

By 2026, the report projects India’s capacity for polysilicon, ingot/wafer production — all essential components of solar PV module manufacturing that are “virtually non existent today” — will reach 38 and 56 MW respectively. Solar cell manufacturing capacity is expected to rise to 59 MW, while module capacity to 110 GW.

According to the report, the price of polysilicon surged after the Covid-19 pandemic from $6.8 per kg to $40 per kg in 2022, and is expected to come down to pre-pandemic levels this year, which will aid domestic manufacturing capacity.

“Even with aggressive market drivers and government support, many minor hiccups still impede the development of the domestic PV manufacturing sector. The biggest challenge is sustained reliance on China for its raw material,” says the report, adding that domestic supply can be strengthened through various policy interventions.

To further bolster domestic manufacturing, the government should consider extending the existing PLI scheme to other “overlooked” ancillary components, such as glass and ethylene vinyl acetate (EVA, used in panel lamination).

It should also consider incentivising electricity consumption among solar PV manufacturers, as well as offer a subsidy for initial capital costs involved with setting up production facilities, it says.

(Edited by Smriti Sinha)

Also read: Gujarat is scripting biggest solar power revolution in India. Other states can catch up

Subscribe to our channels on YouTube & Telegram

Support Our Journalism

India needs fair, non-hyphenated and questioning journalism, packed with on-ground reporting. ThePrint – with exceptional reporters, columnists and editors – is doing just that.

Sustaining this needs support from wonderful readers like you.

Whether you live in India or overseas, you can take a paid subscription by clicking here.

Support Our Journalism

Most Popular