India added 11.3 GW of solar modules and 2 GW of cell manufacturing capacity in the first half (1H) of 2024, according to Mercom India’s recently released research report, State of Solar PV Manufacturing in India 1H 2024.

The capacity additions were driven by a robust solar project pipeline of 132.7 GW planned between 2024 and 2026 and the reinstatement of the Approved List of Models and Manufacturers (ALMM) order in April 2024. The ALMM mandates using only enlisted modules in projects tendered by government agencies, which currently has only domestic manufacturers enlisted.

As of June 2024, India’s cumulative solar module manufacturing capacity reached 77.2 GW, while solar cell capacity totaled 7.6 GW.

The top 10 manufacturers accounted for nearly 58% of module production and dominated cell production.

Over 57% of the installed module capacity supported M10 and G12 wafer sizes, with 50.7 GW of module capacity enlisted in the ALMM per the updated MNRE List–I from July 2024.

Monocrystalline passivated emitter and rear cell (mono PERC) modules comprised most of the country’s production capacity, followed by Tunnel Oxide Passivated Contact (TOPCon), polycrystalline, and thin-film technologies.

India’s solar module capacity is projected to reach 172 GW, while solar cell capacity will reach almost 80 GW by 2026. Mono PERC technology is expected to remain dominant, accounting for 57.2% of modules and 49.7% of cell production by 2026, followed by advances in TOPCon, Heterojunction (HJT), and other technologies.

Commenting on the future trajectory, Priyadarshini Sanjay, Managing Director of Mercom India, highlighted the need for long-term visibility. “Policy certainty and support for long-term manufacturing, including government-aided lending programs, will be critical for investing in solar cell production. Cell manufacturers will find it challenging to justify large investments without a visible, stable market for the next 5-10 years.”

Despite substantial capacity additions, the supply of domestically made modules remains tight, mainly because cell production capacity has not kept pace. Without a significant and rapid increase in cell capacity, many projects will face delays due to domestic content supply shortages.

Gujarat has emerged as the preferred state for solar photovoltaic manufacturing, hosting 45% of India’s solar modules and 52% of its cell facilities as of June 2024. Tamil Nadu and Rajasthan followed, contributing 10% and 8% to the module manufacturing landscape. Telangana and Himachal Pradesh were key states for solar cell production, with 28% of facilities in Telangana and over 10% in Himachal Pradesh.

“Manufacturing clusters in Gujarat are strategically located near major markets like Maharashtra and Rajasthan, with access to ports, reducing procurement costs. The state also provides strong infrastructure support, such as reliable electricity and quick setup of substations,” noted Sanjay, explaining why Gujarat has become the top destination for manufacturers.

In the first half of 2024, government entities issued 7.6 GW solar modules tenders, representing a 191% year-over-year (YoY) increase. During the same period, India imported 13.2 GW of modules, a significant 338% YoY jump, with 84% arriving in the first quarter due to the temporary ALMM order relaxation. Solar cell imports surged to 15.5 GW, up 152% YoY.

Meanwhile, domestic manufacturers exported over 3 GW of solar modules in 1H 2024, marking a 16% YoY increase. Solar cell exports reached 148.6 MW, growing by 195% compared to 1H 2023.

However, Sanjay pointed out the challenges this might pose. “As domestic demand grows, developers will need supply for local projects to be prioritized before the manufacturers export.”

Average module prices are expected to remain high until the supply-demand balance improves, especially given the limited availability of imports. As countries develop their own local manufacturing supply chains and trade restrictions continue to tighten, relying on exports as a long-term growth strategy for manufacturers highly risky.

Among the leading suppliers to Indian solar projects, Jinko Solar ranked first, followed by LONGi Green Energy Technology and Waaree Energies.

Mercom’s State of Solar PV Manufacturing in India 2024 Report is 96  pages long and covers all facets of India’s solar PV manufacturing market, including top manufacturers. For the complete report, visit: https://www.mercomindia.com/product/state-solar-manufacturing-india-1h-2024