India’s solar power sector has witnessed a surge in equipment imports, highlighting the country’s continued dependence on foreign suppliers despite efforts towards self-sufficiency led by Prime Minister Narendra Modi. BloombergNEF’s report reveals a sharp increase in solar panel imports in September, reaching an 18-month peak. Additionally, the value of photovoltaic cell purchases in the first nine months of this year has already surpassed the total for the entire span of three years up to 2022.
The nation heavily relies on China, a key geopolitical rival, for 57% to 100% of its imports in solar modules, cells, wafers, and solar glass since the beginning of 2021. This underscores China’s significant role in India’s solar industry despite New Delhi’s efforts to bolster domestic production and reduce reliance on foreign markets, a strategy initiated in response to disrupted supply chains during the pandemic in 2020 and escalating tensions with China.
India aspires to significantly elevate its solar energy capacity, targeting nearly 39% of its electricity mix from solar sources by 2032, a substantial increase from the current 17%. The aim is to escalate solar module manufacturing capacity to 100 gigawatts annually by 2026, a fivefold surge compared to the current approved government capacity.
Despite efforts to promote local manufacturing through trade barriers, domestic content requirements, and subsidies, India’s drive for self-reliance faces challenges. BloombergNEF notes that despite a rapid expansion in India’s solar manufacturing capacity, the industry, characterized by evolving technology and fluctuating prices, still heavily relies on imports. Approximately two-thirds of India’s cell consumption and the entirety of its wafer requirement were met through imports since the start of 2021, with this dependence expected to persist in 2024.
Concerns loom among Indian manufacturers regarding potential export restrictions by Beijing on machinery crucial for manufacturing wafers, cells, and modules. Presently, India lacks domestic production of wafers or polysilicon. However, strides have been made, with Adani Enterprises Ltd. unveiling a pilot plant for solar ingots and generating the nation’s maiden wafers. Collaborative efforts by conglomerates like Adani Enterprises Ltd., Reliance Industries Ltd., and Shirdi Sai Electricals Ltd. aim to establish India’s inaugural fully integrated solar manufacturing facilities, envisioning a future of enhanced self-sufficiency in solar production.
