Copyright infringement not intended

Picture Courtesy:  DOWNTOEARTH

Context

The Union Ministry of New and Renewable Energy (MNRE) has set a 2028 target to achieve a fully indigenous solar manufacturing ecosystem.

Current Status of Solar Manufacturing in India

Installed Capacity: As of August 2025, solar PV (Photovoltaic) capacity is 119.02 GW, with non-fossil capacity at 251.5 GW, over halfway to the 2030 target.

Manufacturing Capacity: Over 100 GW of solar PV module manufacturing capacity enlisted under the Approved List of Models and Manufacturers (ALMM) for Solar PV Modules.

Import Trends: Imports dropped from $3.36 billion (FY 2021-22) to $2.15 billion (FY 2024-25), yet upstream components like polysilicon remain a bottleneck.

Ecosystem Gap: Strong module assembly but weak upstream production (polysilicon, ingots, wafers), limiting self-reliance.

The 2028 Target: Expanding into Wafers and Ingots

What Are Wafers and Ingots? Ingots are purified silicon blocks; wafers are thin slices used to make solar cells, forming the core of PV modules.

Government Plan: Achieve swadeshi solar cells by 2028, with trajectories for wafers, ingots, and polysilicon being finalized. 

Significance of Solar Manufacturing in India

India, the world’s third-largest producer, faces rising energy demand amid global supply chain uncertainties. Solar manufacturing is critical for:

• Energy Security: Reducing dependence on imported fossil fuels and solar components, particularly from China, who manufactures and supplies more than 80% of global solar photovoltaic (PV) panels.  
• Climate Commitments: Supporting net-zero by 2070 goal and Paris Agreement pledges.
• Economic Growth: Generating jobs, boosting exports, and promoting industrial ecosystems.

Domestic production reduces import dependence, lowers costs, and strengthens resilience against global supply disruptions (e.g., during COVID-19). 

Initiatives taken to boost solar cell manufacturing in India

Production-Linked Incentive (PLI) Scheme 

• Provides financial incentives to manufacturers for setting up integrated, high-efficiency solar PV manufacturing plants.
• Total outlay is ₹24,000 crore, distributed across two tranches.
• The goal is to reduce import dependence and create a robust domestic supply chain. 

Customs duties and fiscal measures 

• Basic Customs Duty (BCD) on imported solar cells was reduced from 25% to 20%, and on modules from 40% to 20% to balance affordability with local production support.
• Other duties: Additional duties, such as the Agriculture Infrastructure and Development Cess (AIDC) and Social Welfare Surcharge (SWS), are also levied on imported cells. 

Market and procurement support 

• Approved List of Models and Manufacturers (ALMM): The government mandates that modules for government-supported projects must be from an approved list of domestic manufacturers.  
• Domestic Content Requirement (DCR): Schemes like PM-KUSUM and the Rooftop Solar Programme require the use of domestically produced solar components. 

Demand creation 

• PM Surya Ghar: Muft Bijli Yojana provides subsidies for residential rooftop solar panels, boosting domestic demand for solar technology. 
• PM-KUSUM Scheme focuses on creating demand within the agricultural sector by enabling farmers to use solar energy for irrigation.

Infrastructure and research 

• Solar Parks Scheme: Offers land and infrastructure to promote large-scale solar projects, including manufacturing units.
• R&D funding: The government offers financial support to promote indigenous solar technology development. 

What are the Challenges in solar cell manufacturing?

Import Dependence: Negligible polysilicon production; reliance on imported silica, silver paste, and wafers.

• China produced about 91% of the world’s polysilicon and over 97% of ingots and wafers in 2023-2024 and controls 80% of solar cell and 83% of solar module production. 

Technology Gap: Indian production costs are higher than China’s due to smaller scale, outdated technology, and limited R&D.

Capital Costs: Investment required for setting up polysilicon and wafer manufacturing facilities is a major financial hurdle.

Policy Execution: Delays in land acquisition, transmission limitations, and project approvals hinder progress.

DISCOM Financial Health: Weak distribution companies limit demand growth, impacting solar adoption.

Environmental Concerns: Solar waste, water-intensive processes, and land use pose sustainability challenges.

Way Forward

Strengthen the supply chain

• Encourage upstream manufacturing: Expand the Make in India and PLI scheme to incentivize the production of wafers and polysilicon.
• Create manufacturing hubs: Develop specialized solar equipment manufacturing parks near ports to streamline logistics and concentrate the ecosystem.

Advance technology and innovation

• Focus on R&D: Increase funding and cooperation between industry, academia (e.g., IITs), and global experts to drive indigenous innovation in high-efficiency cell technologies.
• Invest in new tech: Support the adoption and scaling of next-generation technologies, such as perovskite cells, to remain globally competitive. 

Develop a supportive ecosystem

• Address financing hurdles: Increase the availability of long-tenure, low-interest financing for high-capital ventures, through institutions like IREDA (Indian Renewable Energy Development Agency).
• Skill development: Create specialized training programs to produce a skilled workforce capable of operating advanced manufacturing facilities.
• Implement recycling policy: Introduce a robust and comprehensive e-waste management and recycling policy for solar panels to support a circular economy.

Conclusion

India aims to achieve a swadeshi solar value chain by 2028, aligning energy security, economic growth, and sustainability. With robust policies, innovation, and collective action, India can become the "Solar Manufacturing Hub of the Global South." 

Source: DOWNTOEARTH