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India’s solar manufacturing stuck in a limbo, as new policy fails to show up despite tall claims

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Indian domestic solar manufacturing industry

Indian solar manufacturing industry has a lot of module capacity (more than 5000 MW) and cell capacity (more than 2000 MW) compared to the current size of the Indian market, however most of it lies idle due to a lack of cost competitiveness and outdated technology. Most of the capacity is fragmented across numerous small players, which do not have the capital or technology to become real players in the solar manufacturing market. These capacities are mostly in the range of 20-100 MW, whereas the top solar panel companies from China have a capacity of more than 5000 MW.

India also does not have a supply chain in silicon, with the country totally lacking in production of the key raw materials of polysilicon and solar wafers and remains completely dependent on imports for these crucial raw materials. No one has set up these facilities in the country, despite a huge growing solar demand from the domestic market.

solar panels india

Some of the large domestic players like Vikram, Waaree, Tata and others have only expanded their module capacity, which is a low value add assembly operations. These companies lack technology and expertise in solar manufacturing to become global players. Some of the foreign companies like Trina, Longi, Canadian Solar etc. have announced plans to invest (again in cell and panel manufacturing), but have yet to produce a single cell or panel despite long promises of multimillion dollar investments.

After beating the drum that a new solar manufacturing policy will come up providing Viability Gap Funding (VGF) to solar manufacturers and a guaranteed offtake to the local market, no policy has been legislated. Even the contours of the policy do not make sense, as they require a JV with a developer and manufacturer with a painful way of giving subsidies (as per newspaper reports).

While India procrastinates over its solar manufacturing policy is has missed the bus to other SE Asian nations like Thailand, Malaysia and even Vietnam where large Chinese players have set up module factories to serve exports markets in USA and Europe to avoid anti-dumping duties. There is a lot of talk but no action in India otherwise India could have become the second largest hub of solar manufacturing as it already has cheap labor and huge growing domestic market.

India needs to provide land, utilities and clearances at a cheap cost fast rather than making grandiose announcements of “Make in India” and showing that it has gone up in “ease of doing business” rankings in some reports that are only read by academicians. Countries like Malaysia provides fast approvals and easy access to land and utilities. They also give subsidies which are streamlined and easily understandable. India on the other hand, operates in an opaque manner with no one knowing what the subsidy is and how to get.

Also the state and central governments do not coordinate effectively with a mish mash of incentive creating huge confusion. Removing the red tape and confusion would get investments into India faster rather than making doing drama in investment summits which only sign large investments on MOU papers without anything happening on the ground.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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