As India embarks on the journey towards self-sufficiency in manufacturing components needed for solar projects, the enormity of the challenge has become increasingly apparent as most manufacturers place orders for imported manufacturing equipment.

Industry experts acknowledge the gaps in expertise but insist that the manufacturing industry first needs to develop heft in terms of capacity and ability to compete as exporters, followed by investing in research and development required to produce manufacturing equipment indigenously.

India’s module manufacturing capacity was just over 39 GW at the end of September 2022 (operational capacity was much lower) and is expected to be close to 95 GW by the end of 2025. The findings were a part of Mercom India Research’s newly released report, ‘State of Solar PV Manufacturing in India.’ ALMM registered modules were approximately 21 GW as of January 2023.

“We are at least 4-5 years behind the curve when it comes to possessing the capacity to manufacture our own module-making equipment. Currently, we should solely focus on getting our domestic capacity for producing cells and modules higher because we will need an average of 30 GW solar capacity every year to meet the target of 280 GW by 2030,” the head of sales and marketing at Adani Solar, Rahul Bhutiani, said.

The import of production lines is fraught with risk because the technologies become outdated within 2-3 years. This has caused enormous strain on smaller manufacturers who want to scale capacity and technology.

“Currently, the same machine setup can be used for polycrystalline and monocrystalline modules with minor changes, but TOPCon or Heterojunction (HJT) technologies will need 30-40% changes in the machine, which needs further investment,” a module manufacturer said.

He said the performance-linked incentive (PLI) program should be tweaked to separate the incentives for panels and cells. This would allow participation from those manufacturers who are only making modules and aren’t vertically integrated, or else the program structure would only be beneficial just for a couple of big companies.

“There is no emphasis on manufacturing technology development in India so far. Awarding a specific GW to solar projects annually that use newer technologies with higher efficiencies that are improved yearly will incentivize manufacturers to invest in R&D and kick-start technology development in India.”

Importing equipment

Germany’s solar cell equipment maker Centrotherm recently announced that it had received six different orders from Indian companies for 10 GW capacity. It includes a single order of 4 GW of PERC solar cell production line.

Last year, Reliance Industries signed an agreement to purchase eight sets of HJT cell production lines from China-based Suzhou Maxwell Technology. The company followed it up with another HJT solar module production line bought from China-based SC Solar earlier this year.

Another module manufacturer said importing manufacturing equipment is the reality for Indian players. He added that Indian companies, which have traditionally been involved in manufacturing heavy machinery and factory equipment, need a healthy pipeline of orders to foster domestic manufacturing of such equipment.

The way forward

Industry experts also pointed out that a return on investment in research and development in the module manufacturing process is extremely lopsided because of rapidly evolving technology. Only the big companies can afford to invest in a production line that can go obsolete in a couple of years.

“China is ahead in manufacturing technology because it has several players with 20 GW manufacturing capacity. These companies have the financial bandwidth to invest in R&D as the upside for a successful technological breakthrough is immense,” Bhutiani said.

Further, industry experts said that most companies are currently importing from China because they are technologically at par with European companies but are more cost-effective – a critical element for many module manufacturing firms.

Some large Chinese companies are spending up to 5% of their revenues on R&D.

In effect, India’s dependence on Chinese cells and modules may reduce due to supportive government policies – which are counterproductive for developers. But the hard-earned Chinese expertise in the domain will continue to underpin India’s effort at self-reliance in the solar sector.

“Technology development did not happen overnight in China. The ‘Top Runner’ program – launched back in 2015 – put the technology roadmap in place, which led to the eventual transition from polycrystalline modules to mono, and spurred the development of PERC, bifacial, and other technologies,” said Raj Prabhu, CEO of Mercom Capital Group.