Industry Voices Need for New Policies to Address Solar Capacity Gap in India
As India’s solar energy sector faces growing challenges, industry leaders are calling for new incentives and flexible policies to bridge the widening gap between solar cell and module production. This gap could impact project timelines, investments, and the cost of renewable energy across the nation.
Concerns have risen following China’s proposed restrictions on 12 key solar manufacturing technologies. These measures are raising alarms about the future of India’s renewable energy supply chain. Industry experts insist that stronger incentives for domestic production and supportive policies are essential to avoid shortages in equipment, delays in projects, and increasing solar power prices. Currently, India’s capacity for manufacturing solar modules is far ahead of its capacity for producing solar cells, exposing significant vulnerabilities in its clean energy strategy.
Chetan Shah, Chairman and Managing Director of Solex Energy, has emphasized the urgent need for the Indian government to boost local manufacturing and lessen the reliance on Chinese technologies and equipment. Speaking at the Renewable Energy India Expo in Greater Noida, Shah highlighted that delays in increasing domestic cell production could disrupt supplies of solar modules and put additional pressure on electricity costs. He noted that China controls an astounding 75 to 90 percent of the global solar supply chain.
Domestic Production Gap Risks Future Supply
As of June 2026, India boasted around 262 GW of solar module manufacturing capacity, but only 37 GW for cell production. The country’s ingot and wafer production is at about 2 GW, and it currently holds no capacity for polysilicon manufacturing. This imbalance underscores India’s reliance on imported components, despite significant investments in assembling solar modules.
To address these challenges, Shah has suggested extending the timeline for the Approved List of Models and Manufacturers (ALMM-II) by at least one year, granting local manufacturers more time to set up cell production facilities. He has also called for dedicated production-linked incentives, capital subsidies, and partnerships with local machinery manufacturers, research organizations, and tech providers to strengthen the domestic supply chain and bolster investments in higher-value manufacturing sectors.
Global Trade Shifts Present Hurdles for Solar Investment
China’s proposed export controls include advanced technologies necessary for making polysilicon, wafers, and solar cells, which could lead to increased costs for equipment and delay manufacturing growth, particularly for Indian companies committed to investing in advanced solar cell technologies.
A recent assessment by JM Financial suggests that while these export controls might push India toward long-term manufacturing independence, they could also disrupt immediate project timelines and capital investments. Economically, ramping up domestic manufacturing could create jobs, draw in technology investments, and cut down on import reliance.
Despite these potential benefits, the challenges of higher production costs and restricted access to technology could undermine the competitiveness of solar equipment produced locally. Shah has called for stronger tech partnerships with countries like the US, European Union nations, Japan, South Korea, and Taiwan to diversify sourcing. India now faces the task of finding the right balance between achieving self-reliance in manufacturing and ensuring that solar power remains affordable. Continued policy support, access to technology, and timely capacity expansions are crucial for safeguarding investments in renewable energy and sustaining the country’s growth in clean energy production.
