India's Solar Module Manufacturing Capacity
India's solar module manufacturing capacity is projected to exceed 125 GW by 2025, which is more than triple the domestic demand of approximately 40 GW. This will create an inventory surplus of 29 GW, as reported by Wood Mackenzie.
Factors Driving the Surge
- The increase in capacity is primarily driven by the government's Production Linked Incentive (PLI) scheme.
- This initiative has encouraged rapid expansion of factories across the nation.
Challenges and Concerns
- The industry is facing risks of overcapacity.
- There is a marked decline in exports to the United States due to new reciprocal tariffs of 50%, causing a 52% drop in module shipments in the first half of 2025.
- Cost competitiveness remains a major challenge, with Indian-assembled modules using imported cells costing at least $0.03 per watt more than fully imported Chinese modules.
- Fully ‘Made in India’ modules could cost more than double their Chinese counterparts without government support.
Government Protective Measures
- The Approved List of Models and Manufacturers (ALMM) and a proposed 30% anti-dumping duty on Chinese modules aim to support domestic producers.
Future Potential and Strategy
- India is positioned to become a large-scale alternative to China's solar supply chain, but success depends on:
- Increasing R&D investment.
- Investing in next-generation technology.
- Diversifying into export markets such as Africa, Latin America, and Europe.
Projections and Industry Insights
- According to CareEdge Advisory, India is expected to reach 216 GW of solar capacity by FY28, supported by PLI schemes.
- Efficiency gains show that about 1,700-2,200 panels (at 500Wp) are typically deployed for every 1 MW of solar power, reinforcing scale advantages in project execution.
- India's solar capacity and generation are projected to reach 215.8 GW and 305.0 BU, respectively, in the coming years.
Despite near-term challenges, experts identify India as having the clearest potential to become a large-scale alternative to China's solar supply chain dominance. The focus now needs to shift from building capacity to achieving cost-competitiveness and opening new export markets.
