Key Takeaways
- Concerns arise over the availability and cost of solar cells following local sourcing rules in India.
- Current domestic solar cell capacity is significantly lower than module manufacturing capacity.
- Manufacturers expect to meet future demand with increasing cell production capacity by the end of 2023.
Concerns Over Solar Cell Supply and Costs
In New Delhi, leading solar module manufacturers and vendors have expressed concerns about the rising costs and limited availability of solar cells. These worries have intensified after the new local sourcing rules were implemented on June 1. A significant discrepancy exists between India’s module manufacturing capacity, which stands at approximately 225 GW, and the domestic production of solar cells, currently around 30 GW.
Representatives from the industry recently engaged with officials from the renewable energy ministry to discuss these pressing issues, particularly surrounding the second Approved List of Models & Manufacturers (ALMM). Concerns were primarily voiced by non-integrated module makers, who do not manufacture their own solar cells. As it stands, while India has about 193 GW in the initial ALMM, the limited availability of higher-efficiency cells complicates matters, according to the Rajasthan Solar Association.
Conversely, solar cell manufacturers have asserted that demand can be met this year, with no shortage relative to current needs. They anticipate that additional production capacities coming online by December 2023 will adequately satisfy growing requirements. These manufacturers contend that the annual demand for solar cells will adequately align with their production capabilities, projecting that domestic content demand can be sufficiently addressed by 2026.
Despite the prevailing concerns, the renewable energy ministry has not granted an extension for local sourcing deadlines in response to industry requests; however, exceptions for certain projects have been allowed under specified conditions. The ministry’s decisions highlight its commitment to maintaining policy stability and fostering self-sufficiency within the solar manufacturing ecosystem.
Looking forward, the Indian Solar Manufacturers Association estimates that domestic demand for solar cells will peak at approximately 22-25 GW in 2026. Current projections indicate that solar cell manufacturing capacity could rise to nearly 103 GW by the end of the year, with around 50 GW already under active construction.
As the industry adapts to the evolving regulatory landscape and explores avenues for expanding manufacturing capabilities, achieving a balance between supply and demand will be critical for the future of solar energy in India. Ensuring the availability of high-quality solar cells at competitive prices will remain a defining factor in realizing the country’s renewable energy ambitions.
The content above is a summary. For more details, see the source article.
