India Mandates Locally-made Solar Cells for PV Modules

In a bold move to cut dependency on imports and bolster domestic manufacturing, India has introduced new rules that will require locally produced solar photovoltaic cells in modules from June 2026.

The regulation becomes part of the government’s broader push for self-dependency under the initiative of “Atmanirbhar Bharat” wherein the existing mandates for Photovoltaic modules have been extended to the solar cells ensuring that every critical component of solar technology is sourced domestically.

As the solar sector has emerged as the most crucial segment in the renewable energy thrust of India, this policy can significantly reshape India’s solar landscape.

The Current State of India’s Solar Manufacturing

Solar manufacturing in India stands at a threshold. While the country has a robust installed capacity for PV module manufacturing with approximately 80 GW, solar cell manufacturing is lagging behind at merely more than 7 GW. This has conventionally left Indian companies with no option but to rely upon imports, especially from China, to meet the demands for solar cells used in locally assembled PV modules.

The new mandate thus seeks to address this imbalance by supporting local solar cell manufacturing facilities. Through the stipulation on the use of domestically-made solar cells, the government wants to create a duly self-sustaining ecosystem for solar energy production in India.

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Early Investments in Solar Cell Manufacturing

Various Indian companies have already started establishing their production facilities for solar cells in view of this shift. Some of the key developments include:

➢   Tata Power: It recently inaugurated a 4.3 GW solar cell manufacturing facility in southern India.

➢   Reliance Industries: Reliance Industries is aiming to commission the first phase of its ambitious 20,000 MW integrated solar cell and module manufacturing facility in Gujarat before this year’s end.

➢   Adani Group: Adani group is already operating a 4 GW solar cell and module manufacturing unit in Gujarat.

These initiatives mark the beginning of a significant transformation in India’s solar industry that eventually might place it to compete with global players in renewable energy manufacturing.

Implications of the New Mandate

Have a look at the implications of the new mandate-

➢   Reduced Dependence on Imports:

Dependence on Chinese solar cells has long been a point of contention for India on not just economic grounds, but also due to the concerns over the security of energy supply. The new mandate aims to eliminate the dependency by building robust local supply chains in order to reduce strategic material imports. This is a vision of the government to achieve greater economic self-sufficiency.

➢   Boosting Domestic Manufacturing and Employment:

Expansion of the solar cell manufacturing capacity will stimulate the domestic manufacturing sectors. The policy will attract investment into solar technologies and hence has the potential to create a massive number of jobs throughout the value chain.

This initiative also replicates the trend in the global arena as per a 2023 report by IRENA, since renewable energy jobs showed an 18% positive growth, which shows promising employment prospects in this sector.

➢   Challenges Ahead for the Solar Industry:

Despite the advantages offered, the mandate can face several challenges ahead. The domestic solar cell manufacturing industry is still in its developing stage as compared to China, who is commanding the greater share of global production.

Now, manufacturers will be under pressure to scale up quickly to be able to meet the 2026 demand for domestically produced cells. This again will need huge investments by players in technology, infrastructure, and skilled labour.

Success Stories – Adoption of Solar Devices

The efforts made by India in order to promote solar energy are not restricted to the manufacturing mandates. The PM Surya Ghar Muft Bijli Yojana has emerged as one flagship scheme driving unprecedented growth on rooftop solar installations.

 Launched in February 2023, this subsidy-backed rooftop initiative has facilitated more than 685,000 installations in less than one year, outpacing almost a decade of cumulative growth across the segment.

State-Wise Achievements:

The impact of this scheme is evident in a number of states, leading with the total number of installations, with Gujarat at 286,545, Maharashtra at 126,344, and Uttar Pradesh at 53,423 installations. These figures reflect the increased awareness of solar energy at the grassroots level, supported by favorable government policies.

Rooftop Solar as a Game Changer:

The majority of installations under the scheme come within the grid capacity range of 3-5 kW, catering to the needs of domestic and small commercial segments. This trend points out the potential of rooftop solar to democratize access to clean energy, contributing to reducing electricity bills of households and businesses and helping in achieving the nation’s renewable energy targets.

Advancements in Solar Technology – Role of Perovskite Cells

Meanwhile, in its quest to build more solar manufacturing capacity, India has invested in new technologies, too.

The largest manufacturer of photo-voltaic modules in the country, Waaree Energies, has signed an agreement with IIT Bombay to further research on perovskite solar cells, a next-generation technology that can revolutionize the paradigm of producing solar energy. ESDD in solar energy sector is crucial to create a balance in the circular economy.

➢   Why Perovskite Matters:

Perovskite solar cells exhibit excellent light absorption and efficiency, and production costs associated with these are way lesser compared to conventionally used silicon-based cells. This collaboration between Waaree and IIT Bombay will establish a state-of-the-art fabrication and characterization facility that will drive breakthroughs in solar efficiency and scalability.

➢   Building a Knowledge Ecosystem:

This partnership will not only help India progress on its journey of technological capability but also help it strengthen its overall research ecosystem. The country is encouraging talent with world-class infrastructure for students and researchers who would provide the innovative leads for clean energy.

Global Trends – Solar Energy in the Limelight

India’s emphasis on domestic solar manufacturing coincides with major milestones in renewable energy being unveiled worldwide.

US tariffs on Southeast Asia’s Solar Panel:

The United States has imposed new tariffs on solar panels imported from Malaysia, Cambodia, Vietnam, and Thailand, alleging product dumping by Chinese manufacturers operating in these countries. These tariffs range from 21.31% to as high as 271.2%, reflecting growing trade tensions in the global solar market.

While these measures provide some relief to domestic manufacturers, they also reflect competition in fierce combat and geopolitical elements of influence in the photovoltaic sector.

China’s Role in Driving Renewable Energy Costs Down:

China is at the forefront of the world renewable energy market. Wind and solar products produced in China help the whole world reduce as many as 810 million metric tonnes of the harmful carbon dioxide emissions, claim the country’s authorities. Over the past decade, prices of wind and solar power declined by 60-80%, with China responsible for the majority of this price drop.

The Road Ahead for India

Ambitious renewable energy targets, like achieving 500 GW of non-fossil fuel capacity by 2030, are contingent upon the success of the policies. Though many challenges persist, the country is making decisive strides to build a resilient and competitive solar manufacturing ecosystem.

➢   Key Priorities:

1. Scaling Production: Rapidly increasing solar cell production capacities for meeting domestic and foreign demand.
2. Upgradation of Technology: Research and development investment for upgradation of technology into advanced technologies, such as perovskite cells.
3. Policy Support: Assurance of consistent and long-term policy frameworks to attract investments and enhance investor confidence. Understanding the requirement for EPR authorization is essential to stay compliant.

➢   Potential Benefits:

If executed properly, the new mandate might make India a leader in solar manufacturing worldwide, bring down prices, create jobs, and enhance energy security. In addition, by fostering innovation, India could become a hub for next-generation solar technologies, driving sustainable growth both domestically and internationally. 

To Wrap Up

Adopting ‘locally-made’ solar cells to make PV modules, from the year 2026 onwards, marks a very watershed moment in repositioning India’s renewable energy journey.

By giving importance to local manufacturing and adoption of technology, India is not only addressing its energy needs but is also contributing to the global efforts being to combat climate change. With strong supportive policy and industry collaboration, the future for the solar sector has never looked brighter in the Republic of India. To get expert environmental consulting solutions, visit https://corpbiz.io/.

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