The pace of energy transition is contingent on the steady supply of components necessary for project development. Solar is a major component in India’s goal to install 500 GW of non-fossil fuel-based energy capacity by 2030. However, the government’s push to deploy locally manufactured modules for solar projects has created bottlenecks and could jeopardize the growth rate in capacity additions.

In the first half (1H) of the calendar year (CY) 2024, solar projects totaling 14.9 GW were added in India, topping all previous half-yearly and annual installations. Year-on-year, this was a 282% growth compared to PV installations in 1H 2023.

The surge in installations was mainly due to the rush to import modules to commission projects ahead of the reimposition of the Approved List of Models and Manufacturers (ALMM) Order from April 2024. The government has mandated that developers source modules only from companies enlisted under the ALMM, which currently has only domestic manufacturers.

Among the supply-side challenges developers discussed with Mercom, the quality of modules, high prices, and the ability to cater to large orders stand out.

Reasons for developers’ reluctance – Quality

Several developers noted the lower efficiency of locally made modules and the high degradation rate.

“While we are focused on reaching our renewable energy goals and adding to solar capacities, what we are overlooking is the quality of modules produced in the country,” said Surajit Chanda, executive with project development experience.

“Considering the price point, the modules are not up to the mark,” he added.

Another leading developer pointed out that low-quality modules degrade faster and are more prone to defects. “The domestic modules are not as efficient as Chinese modules. Many of these solar modules are failing the I-V tests. When we check the samples, a 550 Wp solar module is shown as giving the rated wattage, but when we use them in the projects, they give less wattage.”

The I-V tests measure a module’s current and voltage output under different loads. This ensures that the modules operate optimally and produce the expected power output.

However, manufacturers claim that most modules produced in India are of good quality and meet international standards.

“Indian module manufacturers always follow internationally recognized standards such as IEC (International Electrotechnical Commission) certifications, which ensure that their products meet high performance, safety, and reliability criteria. Indian companies have invested heavily in advanced technology and processes to ensure their products are competitive globally,” says Deepak Jain, Chief Technical Officer at Insolation Energy, a module manufacturer.

While Indian manufacturers are producing export-quality modules, the feedback from local developers has been contradictory. Developers highlight that the bill of materials used in modules exported is not the same as in the modules supplied to domestic projects.

Commenting on ensuring the quality of modules, Sishir Garamella, Head of International Business Development at Kiwa PVEL, a solar module reliability and performance testing solutions provider, said, “The onus is mainly on the buyers. Mature markets have a strong bankability process in place. There is an urgent need for the India downstream community to have a similar process in place.”

In April 2021, the government approved the Production-Linked Incentive (PLI) program to encourage domestic manufacturing of globally competitive solar PV modules.

“India’s goal of installing 500 GW of renewable energy does not seem attainable. While PLI is in place to fuel the manufacturing of good-quality modules, it alone cannot make a difference. There needs to be more interventions and incentives for the manufacturers to make global standard modules,” Chanda said.

Chanda also suggested possible interventions. “To improve the quality, the government must build an ecosystem for solar module manufacturers. Most raw materials are sourced from China. The government must create an investor-friendly environment, improve infrastructure, and finance small manufacturers at lower interest rates. This will gradually improve the quality.”

Yadav called for easing import duties on raw materials, especially glass. “The duties can be reimposed once the industry emerges from the sunrise stage.”

Module testing and certification agencies can work with manufacturers to improve and meet the required quality standards.

Tristan Erion-Lorico, VP of Sales and Marketing, Kiwa PVEL, said, “We provide feedback to the manufacturers on the issues we notice during testing. We often notice issues before they are seen in the field, and feedback is provided with data. For example, UVID is a genuine concern with TOPCon cells. The industry is still evolving in its position to solve this issue. That said, issues like LID and LETID are broadly solved. Further, our colleagues at Kiwa PI Berlin provide third-party factory audits to increase the quality in manufacturing facilities around the globe.”

“We have often seen issues in invoking module warranties; hence, it’s best to require testing beforehand to mitigate quality and reliability issues. The need for extended reliability is more important in a rapidly evolving industry from a technology standpoint.”

Deepak Jain from Insolation Energy said assisting manufacturers with the costs and processes of obtaining international quality certifications, such as IEC standards, can help ensure their products meet global benchmarks. “This support might include covering certification fees or providing guidance through the certification process.”

High prices and supply constraints

Solar project development activity has accelerated, with the Ministry of New and Renewable Energy (MNRE)  announcing the annual bidding trajectory of 50 GW until 2028.

“The quality of the domestic modules needs to improve. Even if the manufacturers are asking for higher prices, we can factor that in the PPA prices, but the efficiency should be up to the mark so that we do not have to compromise on generation,” a developer commented.

“In the 1 GW or projects installed, we have about 90% of China-made modules. Even considering imports and customs duties, China-made modules are cheaper and better quality. There is also an issue with Indian modules regarding supply. The supply is low compared to the price at which modules are available in the market,” the developer said.

Virpal Yadav, the COO of Sunkind Energy, concurred. “The price point sometimes does not justify the quality of modules delivered.”

Developers suggest that MNRE investigate the pricing and quality of the domestic modules.

Besides the quality, developers are also facing a shortage of domestic modules. Even if available, the lack of timely supply and higher costs have pushed some installers catering to smaller government projects to resort to second-hand solar modules, risking long-term performance.

The cumulative capacity of ALMM-enlisted modules stands at 50.6 GW. India’s cumulative solar module manufacturing capacity reached 64.5 GW in December 2023. Out of the installed module manufacturing capacity, nearly 60% was equipped to make modules in M10 and G12 wafer sizes. Per Mercom India Research, these additions were driven by domestic demand, the ALMM mandate, and potential export opportunities.