India added 20.8 GW of solar modules and 3.2 GW of solar cell capacity in calendar year (CY) 2023, according to the recently released State of Solar PV Manufacturing in India 2024 Report by Mercom India Research.

The country’s cumulative solar module manufacturing capacity reached 64.5 GW, and solar cell manufacturing capacity reached 5.8 GW as of December 2023. Of the installed module manufacturing capacity, about 60% was equipped to make modules in M10 and G12 wafer sizes.

Priya Sanjay, Managing Director of Mercom India, said, “The installed module manufacturing capacity in the country is 64.5 GW but only 22.2 GW is enlisted under the ALMM as of January 2024. This suggests that a large part of the installed capacity cannot be supplied to projects that are mandated to use modules listed under ALMM.”

According to Mercom India Research, one of the factors contributing to the capacity addition is the existing demand, with a substantial pipeline of projects lined up. Estimates suggest that between 2024 and 2026, approximately 97.5 GW of large-scale projects are slated for development.

Additionally, the initiation of projects like the PM Surya Ghar program, which aims to put rooftop solar systems on 10 million homes and the reimpositions of the order related to Approved List of Models and manufacturers (ALMM) will add to the demand.

Moreover, the commercial, industrial, and export markets are witnessing growth trends with rising export volumes. The ban on Chinese modules has resulted in increased demand from the U.S. and potential opportunities in Europe and parts of Africa.

The report forecasts module manufacturing capacity to exceed 150 GW, and cell capacity to reach over 75 GW by 2026. However, the competitive pricing of Chinese products continues to be a hurdle for Indian manufacturers.

“There has always been a wide gap in the installed domestic manufacturing capacity of solar modules and the operational capacity. One of the main challenges for developers with locally made solar modules is the ability to procure larger quantities of latest technology modules at a given time. Most manufacturers can only deliver the module capacities in a staggered manner. With the increase in the manufacturing capacity by 2026, developers hope the challenge of bulk delivery of modules will be addressed, added Priya Sanjay.”

As of December 2023, monocrystalline modules enjoy a majority of the country’s module production capacity at 67.5%. Polycrystalline modules trail behind at 15.1%. Tunnel Oxide Passivated Contact (TOPCon) module capacity is 12.3%, while thin-film modules comprise 5.1%.

According to the report, the monocrystalline technology is expected to account for 59.7% of the annual module production capacity and 50.5% of the yearly cell production capacity by the end of 2026, followed by  TOPCon, Heterojunction (HJT), and other technologies.

As of December 2023, Gujarat was the frontrunner in India’s photovoltaic (PV) manufacturing landscape, commanding 46.1% of solar module production capacity. Rajasthan and Tamil Nadu came in far second and third positions for module manufacturing capacities, accounting for 9.3% and 7.6%, respectively.

Telangana is home to 39% of the annual solar cell production capacity, the highest in the country as of December 2023. Gujarat and Himachal Pradesh closely followed, with 34.7% and 13.9% of total capacities installed in the country.

Gujarat’s favorable manufacturing policies and investor incentives have played a pivotal role. Additionally, the state boasts some of the lowest industrial electricity rates in the country. Moreover, Gujarat benefits from the demand generated by its neighboring states, such as Rajasthan, Madhya Pradesh, and Maharashtra.

The state has ample demand internally and from neighboring states for projects that are under development and in the pipeline, reinforcing its number one position.

Rajasthan, Tamil Nadu, Karnataka, Andhra Pradesh, Uttar Pradesh, and Maharashtra are expected to witness substantial growth in solar manufacturing capacity.

Nonetheless, Gujarat is poised to maintain its lead even in 2026.

In 2023, government entities issued tenders totaling 9.7 GW to procure solar modules, a 275.6% increase year-over-year (YoY).

India witnessed its highest module imports, reaching 16.2 GW, reflecting a substantial 158% YoY surge from 10.3 GW in 2022.

Domestic manufacturers exported 4.8 GW of solar modules in 2023, showing a significant 204% rise compared to 1.6 GW in 2022.

Additionally, the country imported 15.6 GW of solar cells in CY 2023, a 169% YoY increase from 5.8 GW. Indian solar PV cell exports experienced staggering growth, reaching 286.3 MW in 2023, a remarkable surge of 2,765% from a mere 10 MW in 2022.

The top ten manufacturers within the country accounted for 62% of the module and 100% of cell production capacity as of December 2023.

Mercom’s State of Solar PV Manufacturing in India 2024 Report is 89 pages long and covers all facets of India’s solar PV manufacturing market. For the complete report, visit https://www.mercomindia.com/product/state-solar-manufacturing-india-2024