India’s solar manufacturing sector is at a critical inflection point. Industry leaders and global experts told Firstpost that while capacity expansion has been rapid and well-supported by policy, the next phase must focus on completing the value chain, strengthening ancillary manufacturing, and reducing dependence on China.
Strategic growth and emerging opportunities
Speaking on the sidelines of the TaiyangNews Solar Technology Conference India 2026 (STC.I 2026), Michael Schmela, Managing Director of TaiyangNews, said India is well positioned to capitalise on emerging opportunities in renewable energy, crediting the government for a strategic and calibrated approach.
“What I feel is that it’s obviously a big opportunity for India. The government has done a good job — it was very strategic,” Schmela said. He noted that India introduced the “right mix of sticks and carrots” to protect and scale domestic manufacturing. While some stakeholders may have expected faster growth, Schmela said the progress has been significant given the sector’s starting point.
Demand growth and module capacity
Echoing optimism on demand, Bhupendra Singh Rawat, Chief Executive Officer of DhaSh PV Technologies, dismissed concerns of overcapacity despite India’s installed solar module manufacturing capacity reaching around 144 gigawatts.
“Ten years ago, people couldn’t even imagine gigawatt-scale manufacturing. Today we are at 144 gigawatts, and demand will only grow,” Rawat said, pointing to rising per capita electricity consumption and newer applications such as green hydrogen.
Rawat said India has achieved scale in module manufacturing, but the focus must now shift to completing the entire solar value chain and strengthening ancillary manufacturing. Government measures, including the proposed launch of ALMM List-II by June 2026, are expected to accelerate domestic cell production, with capacity likely to cross 50–60 gigawatts by next year. Draft policies for wafer and ingot manufacturing are also in place, with capacities expected to emerge by 2028.
Polysilicon manufacturing, Rawat noted, would be the final and most capital-intensive piece of the value chain. Nevertheless, he said India is on track to become self-sufficient in solar manufacturing capacity, including ancillaries, by the next financial year.
Sustainability vs scale
Rawat cautioned that sustainability, rather than scale, is emerging as the key challenge for ancillary manufacturers. Citing the junction box segment, he said India has an installed capacity of about 127 gigawatts, but utilisation remains low at 25–30 percent due to limited policy support and low import duties. Similar trends are visible in interconnect bus bars, where capacity is expected to reach around 60 gigawatts by April 2026.
“India can be self-sufficient in ancillaries as well,” Rawat said. “What is required now is focused government support to ensure this capacity not only scales, but sustains in the long term.”
Infrastructure and storage
Schmela said India’s solar expansion must also be complemented by investments in transmission, distribution, and energy storage. Since grid expansion takes time, battery storage offers a faster and more flexible solution.
“If the right frameworks are in place, batteries can grow very quickly. They’re as easy to deploy as solar,” he said, adding that storage helps manage peak demand and reduce power curtailment.
While acknowledging concerns around module overcapacity, Schmela said module manufacturing is relatively simple and less capital-intensive compared to cells, which involve greater technological complexity. On supply chains, he noted that solar manufacturing relies less on rare earths than other clean-energy technologies, making it easier to manage critical mineral risks, though inverters remain a more complex component due to advanced power electronics and cybersecurity considerations.
Schmela also said a potential India–EU free trade agreement could strengthen the sector beyond tariff reductions. “It’s much more than a trade agreement,” he said, highlighting opportunities for collaboration across government, industry, education, and research.
Dependence on China and the need for localisation
However, Manjunath Jyothinagara, Managing Director of UHP Technologies, warned that India risks remaining dependent on China unless incentives are tied to mandatory localisation of high-end engineering equipment. He said that despite capacity expansion, the sector remains vulnerable to geopolitical shocks because core machinery and process technology continue to be imported.
“The industry today is largely a conversion business,” Jyothinagara said, adding that most manufacturers focus on short-term returns by buying ready-made solutions from abroad rather than building indigenous engineering capability.
He argued that incentives such as PLI schemes and import restrictions should be linked to minimum localisation thresholds, even if initial domestic value addition is limited to 10–20 percent. “That is how it starts. Over three to five years, this can scale significantly,” he said, citing China’s strategy of forcing technology transfer through local partnerships.
Jyothinagara said India has lost time but still has an opportunity to correct course by linking future schemes — including rooftop solar and KUSUM projects — to localisation norms for critical equipment.
“Without a shift in mindset towards building indigenous engineering capability, dependence on China will continue — not just in solar, but also in semiconductors,” he said.
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