India could become the world’s second largest producer of solar energy by 2026. According to the new report, it also has a significant presence in all upstream components of solar power production, such as cells, ingots/wafers and polysilicon.
India is expected to reach 110 GW of solar module capacity by 2026, with 72 GW of new generation capacity coming on stream over the next three years. According to a new study, the significant jump will strengthen self-sufficiency and make the country the second largest producer of solar electricity after China. report Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research.
According to the report, India will be in a significant position in all upstream components of solar power manufacturing. It claims cell capacity will reach 59 GW by 2026, ingot/wafer capacity will reach 56 GW and polysilicon 38 GW.
“The future of India’s solar industry is bright,” said report co-author Vibhuti Garg, IEEFA South Asia Director. “The favorable policy environment created by the Indian government is helping the PV industry to grow rapidly, as reflected in frequent announcements of industry expansions or new investments.”
The report shows that India’s cumulative module manufacturing nameplate capacity more than doubled from 18 GW in March 2022 to 38 GW in March 2023.
“Production Linked Incentives (PLI) is one of the key catalysts to drive the growth of the entire PV manufacturing ecosystem in India,” said Jyoti Gulia, Founder, JMK Research. “In addition to expanding infrastructure for all stages of PV manufacturing, from polysilicon to modules, it will also lead to the simultaneous development of markets for PV ancillary components such as glass, ethylene vinyl acetate (EVA) and backplanes.”
The results of both parts of the PLI system indicate that India will see an increase of 51.6 GW in module capacity and at least 27.4 GW in integrated “poly-silicon-to-module” capacity over the next three to four years.
While the PLI scheme is a supply-side measure, the government has also taken steps to increase demand for locally manufactured solar modules. One such step was the introduction of domestic content requirements (DCR) for solar energy in several government schemes, including the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) scheme and the Central Public Sector Undertaking (CPSU) scheme.
One of the government’s major moves to increase demand for domestic solar modules was the introduction of the Approved Module Manufacturers List (ALMM) in 2019. The report states that while higher Basic Duty (BCD) has been applied to imported modules. , the cost difference compared to domestic modules is negligible.
“In such a scenario, ALMM acts as an absolute trade barrier that protects the interests of domestic manufacturers. Thus, during the last year, ALMM has been the main driver of the development of domestic solar power manufacturing,” said Prabhakar Sharma, consultant at JMK Research. “The latest ALMM list updated by the Ministry of New and Renewable Energy on February 27, 2023 includes more than 70 domestic manufacturers with a capacity of 22,389 MW.”
The report also identifies obstacles that hold back the domestic solar industry. The main one is the excessive dependence on China for the upstream components of the PV module production chain, such as polysilicon, ingots and wafers.