The report stated that the success of India’s solar projections depends on reducing the gap between power purchase agreements (PPAs) and power sale agreements (PSAs), ensuring the completion of the PM-Surya Ghar Muft Bijli Yojana (PM-SGMBY) by FY28, and strengthening renewable purchase obligation (RPO) compliance.
However, while module production is catching up, solar cell manufacturing continues to lag — posing a significant bottleneck for India’s clean energy ambitions. Even by FY27, despite efforts to scale up production, more than 50% of India’s solar cells will still be imported, it added.
Module capacity to rise
According to the report, major module manufacturers have outlined aggressive expansion plans, set to increase nameplate capacity from 90-100 GW currently to 150-160 GW by FY27, translating to an effective capacity of 90-100 GW by then.
“Cell capacities will continue to lag. However, integration factor (ratio of cell/module capacities) will improve from 32% to 65%, with four players fully integrated,” it said.
The integration gap & China dependence
Currently, India’s cell-to-module integration ratio stands at a modest 32%, meaning most modules rely on imported cells. While this is expected to improve to 65% by FY27, it still leaves India dependent on external suppliers.
A major hurdle is the UFLPA (Uyghur Forced Labor Prevention Act) regulations in the US, which prohibit the use of Chinese cells for exports. With exports to the US growing, Indian manufacturers need non-Chinese alternatives, further straining supply chains.
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India’s $1-billion bet on domestic manufacturing
Recognising the challenge, the Indian government is expected to allocate $1 billion in incentives to bolster domestic wafer and ingot manufacturing, key components in solar cell production. While this could help reduce import dependence, the question remains: Will these incentives arrive in time to meet soaring demand?
Despite challenges, India’s solar sector is at a turning point. If policies align, land constraints ease, and integration improves, India could significantly reduce its reliance on imports. However, if domestic cell production fails to keep pace, the country risks missing out on the full potential of its renewable energy boom.
