India is on track to attain 110 GW of solar PV module capacity by fiscal 2026, with 72 GW of new manufacturing capacity expected to come online over the following three years. According to a new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research, the huge increase will establish self-sufficiency and make the country the second-largest solar module manufacturing capacity country after China.
According to the research, India would have a significant presence in all upstream components of PV manufacturing. It forecasts that by fiscal 2026, cell capacity would reach 59 GW, ingot/wafer capacity will reach 56 GW, and polysilicon capacity will reach 38 GW.
“The future of the Indian PV manufacturing sector is bright,” said the report’s co-author Vibhuti Garg, director of South Asia for IEEFA. “The favorable policy environment created by the Indian government is helping the PV manufacturing industry to grow rapidly, which is evident in the frequent announcements of expansions or new investments in the sector.”
According to the research, India’s cumulative module production nameplate capacity more than doubled from 18 GW in March 2022 to 38 GW in March 2023.
“The production-linked incentive (PLI) scheme is one of the primary catalysts spurring the growth of the entire PV manufacturing ecosystem in India,” said Jyoti Gulia, the founder of JMK Research. “Besides the augmentation of infrastructure in all stages of PV manufacturing, from polysilicon to modules, it will also lead to the simultaneous development of a market for PV ancillary components, such as glass, ethylene vinyl acetate (EVA), and backsheets.”
According to the findings of both tranches of the PLI plan, India will gain 51.6 GW of module capacity and at least 27.4 GW of integrated “polysilicon-to-module” capacity during the next three to four years. While the PLI scheme is a supply-side strategy, the government has taken steps to boost demand for locally manufactured solar modules.
Domestic content requirements (DCR) for solar electricity were implemented in numerous government programs, including the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) Scheme and the Central Public Sector Undertaking (CPSU) Scheme.
The creation of the Approved List of Module Manufacturers (ALMM) in 2019 was one of the important moves made by the government to increase demand for domestic PV modules. According to the analysis, even after adding a higher basic customs tax (BCD) to imported modules, the cost difference between them and domestic modules is minimal.
“In such a scenario, the ALMM acts as an absolute trade barrier protecting the interests of domestic manufacturers. Thus, over the past year, ALMM has been the most important driver for the development of domestic PV manufacturing,” said Prabhakar Sharma, a consultant for JMK Research. “The latest ALMM list, updated on 27 February 2023 by the Ministry of New and Renewable Energy, includes 70+ domestic manufacturers with an enlisted capacity of 22,389 MW.”
The paper also outlines impediments to the domestic PV manufacturing industry. One of them is an over-reliance on Chinese imports for PV module upstream components such as polysilicon, ingots, and wafers.
Content Credit:PV Magazine