India‘s Solar Sector: โฃA Shiftโข Towards โDomestic Production and โคEnterprising Growth
India’s solar energy market is experiencing a significant change, โฃdriven by a combination of government policies, decreasing costs, and a growing domestic demand. Once heavily reliant on exports, companies like Vega โฃSolar are now finding aโฃ burgeoning customerโค base within โฃIndia โคitself. Prior โขtoโค the COVID-19 โขpandemic,โฃ Vega Solarโข derived 90% โof its revenue from โinternational sales, a figure that hasโฃ now reversed, with domestic demandโค dominating their business.
This shift โcoincides with a broader national push towards clean โenergy.India, historically a major carbon emitter,โข is aggressively investing in solar and other renewable sources. The economic viability of solar powerโ – now โขcheaper than building new coal-firedโค plants – coupled with the country’s โabundant โsunshine, has โคfueledโ a thirty-fold increase in installed solar capacity over theโฃ lastโค decade.
Whileโค India has traditionally โimported a significant portion of its solar components,particularly โคfrom china,this reliance is beginning toโค diminish. Recent data reveals aโข more than one-third decrease in solarโค cellโ and module imports from โขChina during theโฃ first quarter ofโฃ the year, totaling โ$1.3 โขbillion. Thisโ reduction isโฃ a direct resultโข ofโ proactive โขgovernment policiesโข designed โto stimulate domestic manufacturing.โฃ These policies include restrictions onโ imports, โฃfinancial incentives โfor indian manufacturers, and mandates requiring solarโ power producers to source materials from approved domestic suppliers.
The impact of recently announced โขU.S.โค tariffs on solar imports remains uncertain, โwith โคexperts suggesting the โขeffects won’t โbe fully realized for at least a year due to pre-existing order books.However, โคthe overallโข trajectory for Indianโข solar manufacturing remains positive. Capacity for solar module production has more than doubled, reaching โข74 gigawatts, โwhile solar โคcell manufacturing has tripled to 25 gigawatts in the fiscalโ year ending โMarch 2025.
Despite this progress, India still depends on China forโข raw โคmaterials like โpolysilicon, โขdue to a lack of domestic mining and processing infrastructure. However, government initiatives are underway to address this dependency by fostering the development of critical mineral production capabilities.โ Industry analysts predict โthat by 2030, India could potentially reduce its โคimport needsโข to solelyโฃ polysilicon, manufacturing the remaining components domestically.
“the nextโค fewโฃ years will be critical in determining how farโ we canโ go,” notesโข Shubhang Parekh of the National Solar Energy Federation of India, โฃacknowledging the ongoingโ challenges in establishing robust โsupplyโฃ chainsโ for raw โฃmaterial processing.
With nearly โข170 gigawatts of renewable energy projectsโ already inโ the pipeline, and an ambitiousโข target of 500 โgigawatts of clean energy capacity by 2030, India’s solar sectorโข is poised for โcontinued growth, โขfueled by policyโ support and a burgeoning domesticโ manufacturingโฃ base.Sanjay Verghese, Group President forโ Solar Manufacturing โฃand Solar Projects at ReNew, โฃemphasizes the importance of continued policy support, stating, “We are in a good phase right nowโฆwe expect that momentum to be maintained.”