India has made significant strides in solar energy capacity, adding an impressive 25.3 gigawatts (GW) of solar module capacity and 11.6 GW of solar cell capacity throughout the year 2024, as highlighted in a recent report by Mercom India. This growth in manufacturing capacity is largely attributed to the robust demand stemming from the solar project pipeline and the reinstatement of the Approved List of Models and Manufacturers (ALMM) starting April 2024.

Growth in Solar Manufacturing Capacity

The report reveals that around 64.6 GW of total module production capacity is now included in the ALMM directive. This regulatory framework is essential for ensuring that only compliant products are utilized in India’s solar projects.

• Gujarat has emerged as the leading hub for photovoltaic (PV) manufacturing, hosting 42% of the nation’s module capacity.
• By December 2024, Gujarat is responsible for over 37% of India’s annual solar cell output, the highest among all states.

Key Players in Solar Production

Following Gujarat, Tamil Nadu and Rajasthan are noteworthy contributors, accounting for 10% and 8% of the nation’s solar module capacity, respectively. In terms of solar cell production, Karnataka and Tamil Nadu together contribute 18% and 12%, respectively, reinforcing their significance in India’s solar landscape.

• In the past year, public sector entities issued tenders totaling 9.9 GW for solar module procurement in 2024, marking a 6% increase compared to the previous year.
• Additionally, 1.7 GW of module and 11.3 MW of solar cell supply auctions were successfully concluded in 2024.

Import and Export Trends

Last year, India imported a remarkable 65.9 GW of solar modules and cells, with modules making up 36% of these imports and cells accounting for the remaining 64%. However, domestic manufacturers also showcased their capabilities by exporting 4.5 GW of solar modules in 2024, though this represents a 6% decline from 4.8 GW in 2023.

Opportunities Amidst Challenges

Industry experts suggest that the recent tariffs imposed by the U.S. on solar imports from countries such as Cambodia, Vietnam, Malaysia, and Thailand may create new avenues for Indian solar manufacturers to grow their market presence. However, they caution that if Indian companies pursue opportunities in the U.S. market for potentially higher profit margins, it may lead to challenges in meeting domestic demand, especially as local manufacturing capacity is only just becoming sufficient.

U.S. Market Dynamics

The U.S. remains a vital market for Indian solar photovoltaic products, representing 97% of the country’s export shipments in both FY23 and FY24. With the recent imposition of duties, Indian firms are poised to capitalize on this opportunity, potentially boosting their exports further.

While expanding into international markets is essential, analysts emphasize the need for India to maintain a balance between catering to its growing export opportunities and ensuring that domestic energy needs are met. This is particularly crucial in light of the government’s ambitious target of achieving 500 GW of renewable energy capacity by 2030 and initiatives like PM Suryaghar, which prioritize the use of domestically manufactured solar modules.