The launch of the PM Surya Ghar: Muft Bijli Yojana in February of this year has sparked a huge demand for string inverters, with installers saying the supply situation is tight.

According to manufacturers, the demand for string inverters has risen as high as 300% since the introduction of the ambitious residential rooftop solar program, which aims at solar systems on the rooftops of 10 million households by 2026-27.

The Ministry of New and Renewable Energy (MNRE) has constituted a mission directorate to ensure the achievement of the goals and oversee the day-to-day operations.

Since the launch of the latest subsidy program for residential rooftop solar, there has been a 170% increase in applications between February and June 2024, reaching 14.8 million by June.

String inverters are an essential component of a rooftop solar system. A solar inverter converts the direct current generated from the solar panels into usable alternating current.

Vipin Bhardwaj, Country Manager-India, SolaX Power, a solar inverter manufacturer, said the demand for the current year could be in the range of 5 GW. “If the distributors retain the material in inventory, there could be a short period of supply crunch . Distributors must forecast the demand early and inform the manufacturers. We have increased our production capacities and will eventually scale up. Between April and May, we were struggling to meet the demand.”

Bharat Singh TN, Director for Sales and Marketing, Ningbo Deye Inverter Technology, a subsidiary of China-headquartered Deye Group, also confirmed the surge in demand.

“Demand has shot up by five times, and it’s expected to go up further. Earlier, the high demand was limited to a few states. Now, it’s across the country.”

He was, however, confident that the inverter manufacturers could cater to the demand even if it went up ten times.

According to another inverter supplier, all Indian players procure inverters from China. “People are procuring from China and assembling in India. Because of the PM Surya Ghar Yojana, all of a sudden, 3.3 kW and 5.3 kW systems are moving fast. There is a slow supply from Chinese manufacturers as well. Given the present demand, inverter prices will ultimately increase in the coming quarters.

Many installers from Kerala, second after Gujarat in capacity additions under the PM Surya Ghar program, spoke of inverter shortage as a big challenge.

A Delhi-based supplier said there is a demand-supply mismatch for inverters because of the IGBT (insulated-gate bipolar transistor) shortage.

Installers fear the surge in demand for rooftop solar systems could lead to an inflow of low-quality inverters.

Shreya Mishra, Co-Founder of Solar Square, a rooftop solar company, said, “In the last 2 months, more than 100,000 houses have gone solar in India , and the supply chain is currently scrambling. There is 2x-3x latent capacity in the market, and it will be a few months before the capacity ramps up. With the current supply, the market cannot grow to 100,000 houses per month. Within 2-3 months, the supply should be back on track, and capacities will have to be ramped up to reach 100,000 houses per month by 2025 to 350,000 houses per month by 2027.”

She feared that if there was a supply shortage, large players would lock the supply chain, and smaller ones would suffer. “There could be an influx of low-quality inverters with the release of excess stock from inventory. The end consumer is likely to suffer.”

Installers say much of the inverter demand is for 3 kW and 5 kW capacities. Mohammed Fayaz Salam , CEO & Director of Operations of Sunsenz Solar, a Kerala-based installer, said, “We faced some shortage in April and May.

Most inverters are imported from China, and deliveries take nearly 1.5-2 months to reach India. With the sudden uptick in demand, we are anticipating some demand-supply crunch. The small players may not be able to stock up.”

According to Mercom’s India Solar Export-Import Tracker, nearly 90% of components used in inverters are imported from China.

With DCR modules already in short supply, inverter shortages could add to delays in rooftop installations, further slowing down the PM Surya Ghar: Muft Bijli Yojana.