Can India become a Solar Photovoltaics manufacturing hub?

Solar photovoltaics have been the driving force behind India’s push towards the adoption of cleaner energy generation technologies. From less than 10 MW in 2010, India has added significant PV capacity over the past decade, achieving over 50 GW by 2022.

The country plans to achieve 500 GW of renewable energy by 2030. Out of this, about 280 GW is expected to be generated through solar photovoltaics. This necessitates the deployment of nearly 30 GW of solar capacity every year until 2030. India’s current solar module manufacturing capacity is limited to 15 GW per year. The demand supply gap widens as we move up the value chain. India remains dependent on imports of solar modules for field deployment.

There is a huge gap on the raw material supply chain side. India will have to work on technology tie ups to make the right grade of silicon for solar cell manufacturing. Since 90% of the world’s solar wafer manufacturing currently takes place in China. It isn’t clear how and where India will get the technology. As of now, India is more of an assembly hub rather than a manufacturing one. In the long term, it would be wise to move up the value chain by making components.

Over-reliance on Chinese imports for upstream components of PV modules such as polysilicon and ingots/wafers. Land, the most expensive part of solar projects, is scarce in India due to the country’s large population . Establishing state-of-the-art manufacturing facilities for cells and modules would require access to technology. It is unlikely that companies that have spent millions of dollars on in-house and external R&D would make it easy for India to access the latest technology as a lower cost.

Indian industry needs to newer and superior technologies as part of expansion plans. India’s path to becoming a manufacturing hub for solar PV modules requires putting some tax barriers and commercial incentives. The country needs strong industry-academia collaboration in an innovative manner to start developing home grown technologies. Policy stability is necessary to sustain investor confidence in the market. The Indian government must segment the PLI scheme to also include more upstream components, PV equipment machinery and ancillary components for more holistic development of the PV manufacturing ecosystem. India must aim to build enough PV capacity to satisfy local demands and maintain a healthy global presence.