Photovoltaic Manufacturing Capacity - April 2023
Photovoltaic Manufacturing Capacity - April 2023
Photovoltaic Manufacturing Capacity - April 2023
Contents
Key Findings .................................................................................................................................................. 4
Executive Summary ...................................................................................................................................... 5
Glossary of Terms ......................................................................................................................................... 8
1. Indian Solar Photovoltaic Manufacturing Landscape............................................................................. 9
2. Trends in Domestic PV Manufacturing ................................................................................................ 18
3. Impact of the Approved List of Module Manufacturers in Driving the Indigenisation of PV
Manufacturing ............................................................................................................................................ 24
4. Risks and Challenges ............................................................................................................................ 26
5. Analysis of Emerging Global PV Hubs Outside of China .................................................................... 29
6. The Way Forward .................................................................................................................................. 36
7. Conclusion ............................................................................................................................................. 42
About JMK Research & Analytics ............................................................................................................. 44
About IEEFA ............................................................................................................................................... 44
About the Authors ...................................................................................................................................... 44
Figure 13: Proposed Expansion Plans of Solar PV Module Manufacturers in the U.S………………... 31
Figure 14: Projected Solar PV Module Manufacturing Capacity in the U.S. 2022–2030……………... 32
Figure 15: Proposed Expansion (by PV Segment) and Associated Investments in Europe by 2025... 34
Figure 16: Expansion Plans of Major European PV Manufacturers by 2025…………………………… 34
Figure 17: Expected Global Market Share Growth of the EU by 2025 (% Segment Wise)……………35
Figure 18: Year-Wise Estimated Additional Manufacturing PV Capacity………………………………..36
Figure 19: Solar Modules Export from India: Trends and Major Export Markets……………………… 37
Figure 20: Polysilicon Price Forecast Trend………………………………………………………………. 38
Table 1: Domestic PV Supply Chain: Current Status and Outlook (December 2022) ......................... 10
Table 2: PV Technologies Preferred by Various Indian Manufacturers ................................................. 19
Table 3: Solar Wafer Sizes and Their Module Wattage .......................................................................... 20
Table 4: List of Beneficiaries Under Solar PLI Tranche 1 ....................................................................... 21
Table 5: Current Status of PV Manufacturing Facilities of PLI Beneficiaries......................................... 21
Table 6: Major Solar Equipment Manufacturing Deals (2022 onwards) ................................................ 27
Table 7: Polysilicon Production Parameters (India vs China) ................................................................. 27
Table 8: Manufacturing Credit Accorded to PV Manufacturers Under the Inflation
Reduction Act..............................................................................................................................................31
India’s Photovoltaic Manufacturing Capacity Set to Surge 4
Key Findings
Compared to FY2022, Indian PV exports (by value) have already risen by more
than 5x in FY2023.
India’s Photovoltaic Manufacturing Capacity Set to Surge 5
Executive Summary
India’s nameplate manufacturing capacity for solar photovoltaic (PV) modules will likely
reach 110 gigawatts (GW) by 2026. Upon reaching that mark, the country would attain
self-sufficiency for its solar PV module demand. India should then focus on expanding
its reach in other global markets and offer its PV products as a viable alternative to
China in terms of quality and price. Favourable policies, particularly the production-
linked incentive (PLI) scheme have helped PV manufacturing grow rapidly in the last
two to three years, with the nameplate capacity for both cells and modules more than
doubling. Yet, overreliance on imports for upstream components, muted interest among
domestic consumers for locally made PV products and lack of skilled manpower to
install and operate the high-tech machinery is holding back the full potential of the
industry. Policy stability must continue to sustain investor confidence in the PV
manufacturing sector.
Since the early 2010s, the world has largely depended on China for its photovoltaic (PV) equipment
requirements. The huge concentration of the entire PV value chain in one country poses a potential
risk to other countries. It leaves them susceptible to localised supply chain shocks and other
challenges.
In recent years, PV importers, such as India, the United States of America (the U.S.) and Europe,
have enacted several measures to limit the dependence on China and support local PV
manufacturing.
India introduced a safeguard duty (SGD) in 2018, while the U.S. instated anti-dumping duty (ADD) on
Chinese PV imports. More recently, the U.S. issued its Inflation Reduction Act (IRA), which provides
an extensive production-linked incentive plan to support PV manufacturing.
In India, the government has put in place several tariff (basic customs duty (BCD)) and non-tariff
(Approved List of Models and Manufacturers (ALMM)) barriers to PV imports. In addition, the
government included solar PV manufacturing in its production-linked incentive scheme (PLI)
scheme, with a total outlay of approximately US$3.2 billion spread over two tranches.
Echoing the favourable policy environment created by the Indian government, PV manufacturing has
grown rapidly in the last two to three years. Between 2020 and 2023, the nameplate capacity for
both cells and modules more than doubled in India. We estimate that the operational capacity for
both cells and modules is between 50-60% for most manufacturers.
India’s Photovoltaic Manufacturing Capacity Set to Surge 6
2020 3
15 Polysilicon production capacity
Ingot/Wafer production capacity
Cell production capacity
2022 4.3
18 Module production capacity
2023 6.6
38
38
2026 56
e 59
110
By 2026, India will likely reach the 110 gigawatts (GW) mark in solar module manufacturing
nameplate capacity. India will also have a notable presence in all upstream components of PV
manufacturing, such as cells, ingots/wafers and polysilicon.
The PLI scheme is one of the primary catalysts spurring the growth of the entire PV manufacturing
ecosystem in India. Besides the augmentation of infrastructure in all stages of PV manufacturing,
from polysilicon to modules, it will also lead to the simultaneous development of an ancillary market.
Based on the result of both tranches of PLI, the scheme will lead to the direct augmentation of
51.6GW of module capacity and at least 27.4GW of integrated polysilicon-to-module capacity in
India.
PV technology is continuously evolving. Poly-crystalline, which was the mainstay just a few years
back, is already obsolete. Currently, designs for all existing and proposed manufacturing lines are for
mono-passivation emitter rear contact cells (PERC). This continuous technology shift highlights the
need for manufacturers to plan carefully while designing their PV lines to accommodate all future
scenarios. Hence, all current mono-PERC line designs can easily upgrade to other upcoming
technologies, such as Heterojunction technology (HJT) or Tunnel Oxide Passivated Contact
(TOPCon).
Furthermore, all major PV importers also aim for a “China+1” strategy for their PV sourcing
requirements. In addition to already having the second largest module manufacturing capacity, India
has significant expansion plans in the next two to three years. Hence, Indian tier-1 manufacturers
have a huge interest and demand from abroad for their products. Compared to the financial year
(FY) 2022, Indian PV exports (by value) have already risen by more than 5x in FY2023.
India’s Photovoltaic Manufacturing Capacity Set to Surge 7
However, despite the growth and demand from other exports market, the Indian PV manufacturing
sector is still facing headwinds. These include sustained reliance on imports, especially for upstream
components (polysilicon and ingots/wafers), ancillaries and PV machinery. Although the quality of all
tier-1 Indian manufacturers is comparable to global standards, the manufacturers have complained
that the domestic consumer base is largely hesitant towards Indian PV products. In addition, the lack
of skilled manpower to install and operate the high-tech machinery, especially for cells and other
upstream components, is also an ongoing challenge.
The future of the Indian PV manufacturing sector is bright. Upon attaining self-sufficiency in the next
two to three years, India must focus on expanding its reach in other global markets and offer its PV
products as a viable alternative to China in terms of quality and price. In the meantime, policy
stability is a must for sustaining investor confidence in the market.
India’s Photovoltaic Manufacturing Capacity Set to Surge 8
Glossary of Terms
Abbreviation Definition
ADD Anti-Dumping Duty
ALMM Approved List of Modules and Manufacturers
BCD Basic Customs Duty
CAPEX Capital expenditure
DCR Domestic content requirement
EVA Ethylene Vinyl Acetate
EU European Union
EC European Commission
FY Financial year
GW Gigawatt
GDP Gross Domestic Product
HJT Heterojunction Technology
IRA Inflation Reduction Act
IEA International Energy Agency
IREDA Indian Renewable Energy Development Agency
mm Millimetre
Mono PERC Monocrystalline Passivated Emitter and Rear Cell
MNRE Ministry of New and Renewable Energy
MW Megawatt
PLI Production Linked Incentive
PERC Mono Passivation Emitter Rear Contact Cell
PV Photovoltaic
PM-KUSUM Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan
R&D Research & development
ROW Rest of world
SGD Safeguard Duty
SEIA Solar Energy Industries Association
TOPCon Tunnel Oxide Passivated Contact
US United States
USA United States of America
USD United States Dollar
UAE United Arab Emirates
Wp Watt-peak
XUAR Xinjiang Uyghur Autonomous Region
India’s Photovoltaic Manufacturing Capacity Set to Surge 9
1
Ministry of Finance. Finance Minister announces Government Reforms and Enablers across Seven Sectors under Aatma Nirbhar
Bharat Abhiyaan. May 2020.
India’s Photovoltaic Manufacturing Capacity Set to Surge 10
M.G. Ingot/
Polysilicon Cell Module
Silicon Wafer
In India, PV manufacturing capabilities drastically reduce as we move up the value chain, from solar
modules and cells to ingots/wafers and polysilicon. This is due to the increasing complexity and
manufacturing capital expenditure (capex) requirements as we move upstream in the PV value
chain. Historically, polysilicon and ingots/wafers have had negligible to zero relevance in India’s
overall PV commodities/products trade. The domestic industry has relied entirely on imported
products from international markets for these components.
Table 1: Domestic PV Supply Chain: Current Status and Outlook (December 2022)
Nameplate
38GW 6.6GW Negligible Nil
Capacity
Operational
19-20GW 3-4GW Negligible Nil
Capacity
Number of
70+ 8+ 1 (Adani Solar) Nil
Active Players
Substantial progress
Numerous mid- to Pace of underway in terms of
No presence currently.
Current large-scale capacity development capacity addition; Adani
PLI scheme to act as a
Status additions are in strongest of all Solar aims to expand to
critical catalyst.
progress stages 2GW capacity by the
end of 2023
Moderate to highly
Very strong mid- to Total nameplate Low favourability for
favourable near-term
long-term prospects capacity to capacity addition in the
prospects will advance
with total nameplate exceed 50GW in near term owing to the
Outlook the progress of the
capacity to reach three years on highly complex
manufacturing plans of
about 110 GW in account of high manufacturing process
big and established
three years demand and capex
manufacturers
Source: JMK Research
Over the next two to three years, India aims to build its presence across all stages of PV
manufacturing. It has a long-term target to build enough capacity to meet the needs of both the
domestic and export markets.
India’s Photovoltaic Manufacturing Capacity Set to Surge 11
2020 3
15 Polysilicon production capacity
Ingot/Wafer production capacity
Cell production capacity
2022 4.3
18 Module production capacity
2023 6.6
38
38
2026 56
e 59
110
Modules
India currently has one of the largest solar module manufacturing capacities outside China.
Moreover, with several manufacturers announcing their expansion plans, the near to mid-term
prospects of the sector are also very strong.
Existing Capacity
According to JMK Research, India’s cumulative module manufacturing nameplate capacity as of
March 2022 was 18GW. By March 2023, the cumulative capacity had leapfrogged to around 38GW,
a remarkable addition of more than 100%.
2
Business Standard. Solar manufacturing PLI to create 90 GW additional capacity: RK Singh. October 2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 12
JMK Research estimates that leading manufacturers’ operational module manufacturing capacity is
about 50-60% of their nameplate capacities.
The top ten domestic manufacturers contribute 72.3% of this cumulative capacity (see Figure 4).
As of March 2023, Waaree, with a capacity of 9GW, is the largest module manufacturer in India.
Waaree 9
Adani (Mundra) 4
Goldi 2.5
RenewSys 1.75
Premier 1.6
Rayzon 1.5
Saatvik 1.5
Emmvee 1.25
Solex 1.2
Pahal 0.9
Insolation 0.7
Jakson 0.6
Navitas 0.5
Others 7.0
0 2 4 6 8 10 12
Capacity (GW)
Source: News articles, JMK Research
The coastal state of Gujarat alone accounts for nearly 57% of all the forthcoming PV manufacturing
capacity. Some major reasons manufacturers chose Gujarat for setting up their PV fabrication
facilities (fabs) include cheaper industrial electricity prices and easy access to ports for imports and
exports. Further, the base of some of the largest Indian PV manufacturers, such as Adani and
Waaree, is already in Gujarat.
India’s Photovoltaic Manufacturing Capacity Set to Surge 14
18%
New
6%
capacity
addition
6% 2023-2026: 57%
72.8GW
6%
7%
Cells
In the past few years, solar cell manufacturing capacity in India has risen. Still, it lags significantly
behind the module manufacturing capacity. However, based on the announced expansion plans of
several local manufacturers, domestic cell manufacturing is likely to grow rapidly in the next two to
three years.
Existing Capacity
In March 2022, the cumulative capacity of cell manufacturing was about 4.3GW, which increased to
about 6.6GW by March 2023, an addition of 53.4%. According to industry estimates, the operational
capacity could be 50% (or even less) of the nameplate capacity.
India’s Photovoltaic Manufacturing Capacity Set to Surge 15
Adani 4
Premier 0.75
Websol 0.25
RenewSys 0.13
BHEL 0.105
BEL 0.01
0 1 2 3 4
Nameplate capacity (GW)
• In April 2022, Reliance signed an agreement with Chinese solar cell equipment supplier Suzhou
Maxwell Technology to purchase heterojunction technology (HJT) cell manufacturing lines to
manufacture 4.8GW of HJT cells.
• Reliance will use the high-efficiency HJT of Renewable Energy Corporation (REC) Solar Holdings,
a Norway-based PV manufacturer it acquired in October 2021, for its Jamnagar factory.3
Other companies are also planning expansions. For example, Grew Energy plans to enter the big
league of solar PV manufacturers, aiming to build a 2GW cell manufacturing facility by 2026. In a
more recent development, Centrotherm, a Germany-based technology and equipment provider to
3
PV Tech. Reliance Industries’ REC Group lands PV equipment supply deal with Maxwell Technologies for HJT modules. October
2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 16
the PV industry, disclosed that it had received orders for delivering solar cell manufacturing lines of
more than 10GW capacity from six customers in India. 4
Some other prominent players looking to set up new cell manufacturing lines include Vikram Solar,
ReNew, Emmvee, Premier Energies and Solex. Existing players, such as Jupiter and Websol, are
also expanding their operational cell capacities.
Ingots/Wafers
China has 97% of the global solar wafer manufacturing capacity, according to the International
Energy Agency (IEA).5 It also holds 80–85% of the manufacturing capacity of polysilicon, the raw
material for wafer manufacturing. The polysilicon capacity outside of China (15–20%), translating to
60-80GW, is in the U.S., Germany etc. Therefore, as an alternative to China, India must source a
significant portion of its polysilicon requirement from these countries for domestic wafer
manufacturing.
The capex of ingot/wafer manufacturing is roughly the same as cell manufacturing. However, the
current technology associated with wafer manufacturing is less complex than that of cells. We expect
these fundamental aspects, inter alia, to drive domestic opportunities in India for wafer
manufacturing.
Existing Capacity
So far, in India, Adani Solar is the only company that has demonstrated a product in the
ingots/wafers stage. In December 2022, Adani Solar introduced a large-sized monocrystalline silicon
ingot in its Mundra (Gujarat) facility. This development led the company to become India’s first
manufacturer of monocrystalline silicon ingots, capable of producing M10 (182mm) and M12
(210mm) size wafers. Adani Solar will exclusively use these ingots to produce its modules, whose
efficiencies will range from 21% to 24%.6
Upcoming Capacity
While Adani Solar has initiated wafer production, it also plans to add 2GW of ingots/wafers capacity
by December 2023, which it intends to scale up to 10GW by 2025.
In addition, in October 2021, Reliance New Energy Solar, a subsidiary of Reliance Industries Limited,
invested US$29 million in German wafer manufacturer, NexWafe. The two companies also entered
an agreement through which Reliance will access NexWafe’s proprietary technology, which the
Indian company will use to build large-scale wafer manufacturing facilities in India.
Finally, in July 2022, Emmvee Photovoltaic announced its plan to set up 1.5GW of wafer-to-module
capacity in India by the end of 2023.7
4
PV Magazine. Centrotherm’s order book exceeds 10 GW in India. January 2023.
5
IEA. Special Report on Solar PV Global Supply Chains. July 2022.
6
Mint. Adani Solar introduces India’s first large sized monocrystalline silicon ingot. December 2022.
7
Company Website.
India’s Photovoltaic Manufacturing Capacity Set to Surge 17
Polysilicon
Polysilicon, the first stage in the PV manufacturing chain, involves the most complex manufacturing
process. Its capex requirement is very high. For example, setting up a polysilicon manufacturing
facility to produce 1GW of solar modules can cost approximately US$100–150 million.
Manufacturers with access to large capital reserves, such as Reliance and Adani, will likely be at the
forefront of domestic polysilicon manufacturing. The polysilicon they produce will likely be for self-
consumption as raw material for their own wafer manufacturing facilities. Building fully integrated PV
manufacturing capacities is prudent for these companies which have laid down huge commitments
in the larger renewable energy ecosystem, including building large-scale green hydrogen production
facilities.
Through integrated factories that PLI beneficiaries are setting up, we expect India to host the first of
the future polysilicon manufacturing capacities within the next couple of years.
India’s Photovoltaic Manufacturing Capacity Set to Surge 18
Shift in Technology
Over the last two to three years, the domestic PV manufacturing industry has dramatically moved to
adopt advanced manufacturing technologies. We expect this trend to become stronger in the mid-
term. Companies have set up the latest manufacturing facilities, which host semi- or fully automated
machinery, either as an upgrade to obsolete manufacturing lines (usually on the part of big,
established manufacturers) or as greenfield assets by new entrants.
Mono PERC technology, the workhorse of the global PV industry, predominantly forms the basis of
new PV manufacturing lines. Though the domestic industry now possesses the technological
capabilities to produce high-efficiency mono PERC cells and modules, it lacks production capacities
at scale.
Many Indian manufacturers are transitioning to producing cells and modules with large wafer
formats/dimensions. These modules have improved power output (wattage) between 435–650 watt-
peak (Wp) or even higher. In addition, the adoption of bifacial module technology has also gained
substantial momentum in the last one to two years.
The following section covers the recent trends in domestic PV manufacturing in India in detail in
terms of aspects like cell technology and wafer format.
India’s Photovoltaic Manufacturing Capacity Set to Surge 19
TOPCon HJT
Wafer Format
Existing and prospective domestic cell manufacturers are either adopting or looking to adopt mono
PERC technology with wafer sizes up to M12 (210mm) through M6 (166mm) and M10 (182mm).
M10 wafers will likely be the preferred domestic market choice in the foreseeable future, based on
lower logistics costs during transportation vis-à-vis M12-based modules.
India’s Photovoltaic Manufacturing Capacity Set to Surge 20
It must, however, be noted that any greenfield investment for new manufacturing lines or any
modifications to existing manufacturing lines dealing with wafer sizes up to M6 requires a moderate
capex as opposed to wafers sized M10 and beyond. The latter needs many manufacturing line
modifications, and the associated equipment requires huge capex investments.
With the larger wafers (M10 and M12) linked to superior performance (significantly greater power
output), the overall cost of production vis-à-vis smaller wafers would be only modestly higher.
M3 370–390
M6 435–460
M10 535–560
M12 590–650
Bidder’s Manufacturing Eligible Capacity for PLI Total PLI for Five
Winner Name
Capacity (MW) (MW) Years (Rs billion)
Integrated wafer-to-module manufacturing lines under the first tranche will likely be online in the
short-to-medium term. The main challenge lies in the setting up of polysilicon manufacturing lines.
Setting up polysilicon manufacturing lines of 4GW (PLI-linked) capacity is financially unviable owing
to its high capex requirements.
Thus, PLI Tranche 1 winners, Reliance and Shirdi Sai Electricals, both bid in the second tranche,
where they were allotted additional capacities of 6GW each (Total PLI (PLI 1 + PLI 2) Cap – 10GW).
PLI beneficiaries are already planning and setting up factories. Reliance and Adani are in various
stages of setting up fabs of 10GW each. Shirdi Sai Electricals, which is currently setting up only 4GW
capacity, will expand to 10GW of PV manufacturing capacity in the future, owing to its win in the
second tranche of PLI.
India’s Photovoltaic Manufacturing Capacity Set to Surge 22
Rs crore
4800
5000
4000 1500
4000 3400
3000 3000 3000 3000
3000 2400 2400 1000
2000 2000
2000 1700
1500
1200
1000 1000 1000 500
1000 500 500
0 0
Reliance
Grew Energy
ReNew
Shirdi Sai Electricals
JSW
Waaree
Source: SECI
8
The Economic Times. Solar PLI of Rs 19500 crore under tranche II puts focus on product efficiency levels. October 2022.
9
Business Standard. Solar manufacturing PLI to create 90 Gw addl capacity in India: R K Singh. October 2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 23
SECI conducted the bidding process for this second tranche of PLI, which concluded on 28 February
2023. As per the results announced on 28 March 2023, Shirdi Sai Electricals, through its subsidiary
Indosol Solar Private Limited, secured the highest PLI amount of Rs33 billion (US$401 million) for an
integrated polysilicon-to-module manufacturing capacity of 6,000MW.
Other prominent winners include Reliance (6,000MW), Waaree (6,000MW), ReNew (4,800MW),
Vikram Solar (2,400MW), and Tata Power Solar (4,000MW). Adani, one of the largest domestic solar
PV manufacturers, did not participate in PLI Tranche 2 bidding process.
Notably, U.S.-based solar manufacturer, First Solar, became the first and only non-Indian entity to
secure a PLI. It received an incentive of Rs11.78 billion (US$143 million) for setting up a 3,400MW
integrated polysilicon-to-module factory.
PLI Tranche 2 marks the entry of some prominent Indian solar developers into the manufacturing
space. These include Avaada, ReNew and Amp energy. However, a significant portion of the
manufacturing capacity by these developers will be for self-consumption in their own solar projects.
Polysilicon
Module 27,400
Stage 2 to 4 16,800 51,600 16%
30%
Ingot/Ingot/
Wafer
Cell 44,200
Stage 3 to 4 7,400 51,600 25%
29%
Over the next few years, the PLI scheme (both tranches combined) will directly lead to the setting up
of 27.4GW of integrated polysilicon-to-module manufacturing capacity in India. Additionally, the PLI
scheme will add at least 51.6GW of module production capacity to reach 110GW by FY2026.
India’s Photovoltaic Manufacturing Capacity Set to Surge 24
10
MNRE. Updation of list 1 of ALMM. February 2023.
India’s Photovoltaic Manufacturing Capacity Set to Surge 25
Figure 10: Net Availability of Domestic High-Quality High-Wattage Modules in the Open Market
The limited availability of high-wattage modules consequently results in a substantial delay in the
commissioning timeline of multiple solar projects, especially in the utility-scale segment. To address
this shortage, in March 2023, the Indian government announced that it would defer ALMM
implementation by a year until March 2024, until domestic PV manufacturing could sustain local
demand.11
While the ALMM deferment is a big relief to the developers, it is a temporary setback to domestic
manufacturers’ rapid expansion plans. At this juncture, it is critical for regulatory stakeholders to
carefully balance the needs of developers and manufacturers in the best interests of the overall
growth of the solar sector in India.
11
MNRE. Approved models and manufacturers of solar photovoltaic modules order amendment. March 2023.
India’s Photovoltaic Manufacturing Capacity Set to Surge 26
35 29
30 27
25 5 8
US¢/Wp
20
15
10 22 21
5
0
Domestic Imported
Note: 1. The module type considered in the price trend in this figure is 440–450Wp Mono PERC (Monofacial).
2. These prices do not include freight charges and other associated costs.
This further adds to higher input costs for manufacturers and, hence, higher selling prices of
modules compared to Chinese counterparts. All these duties add up and form a significant portion of
the landed price of a domestically manufactured module. Hence, a domestically manufactured
module's final landed price is almost equal (only a US$0.01-0.02/Wp difference) to its imported
counterpart, even with a 40% BCD.
India’s Photovoltaic Manufacturing Capacity Set to Surge 27
Due to the higher initial capex and industrial electricity prices, it is more expensive to build and
operate a polysilicon factory in India vis-à-vis China. With China scaling up its polysilicon production
India’s Photovoltaic Manufacturing Capacity Set to Surge 28
significantly over the next few years, it will be difficult for Indian manufacturers to maintain cost
competitiveness with their Chinese counterparts.
For the same reasons, Indian manufacturers are apprehensive about entering polysilicon production.
Even those that have announced plans to enter the segment (such as Adani) may use a large
proportion of their polysilicon production mostly for their own plants. Hence, even with the rest of the
solar supply chain secured domestically, polysilicon may be India's last persistent hurdle to achieving
self-sufficiency in solar PV manufacturing.
Source: IEA. Special report on solar PV global supply chains. July 2022
The dominance of China in solar PV manufacturing is visible in the output module production
volumes of each country in the past 12 years. The share of China in global solar module production
has increased from around 50% in 2010 to around 70% in 2021 and 2022.
12
PV TECH. Top 10 PV module suppliers in 2022 shipped 245 GW. February 2023.
India’s Photovoltaic Manufacturing Capacity Set to Surge 30
• In 2014, the U.S. Department of Commerce imposed anti-dumping duties on solar PV cells and
crystalline silicon imports from China and Taiwan. 15
• In 2018, the US imposed a safeguard duty on solar cells and modules. Initially, it was 30% and
later reduced to 18% in 2022.
• In 2022, the U.S. Senate approved the Inflation Reduction Act, which commits an investment of
US$30 billion towards manufacturing renewable energy components and electric vehicle
batteries. This kind of policy intervention significantly boosts local manufacturers’ trust in the
demand for local products, resulting in more progressive expansion plans. Further, the Act
provides manufacturing credit for all stages of PV manufacturing, from polysilicon to modules.
13
Reuters. U.S to consider tariffs on solar panels made in southeast Asia. March 2022.
14
Baird Holm LLP. Uyghur forced labor prevention act will affect imported solar modules. July 2022.
15
PV Magazine. Solar trade war: US imposes preliminary anti-dumping tariffs of 26-165% on solar PV from China, Taiwan. July 2014.
India’s Photovoltaic Manufacturing Capacity Set to Surge 31
The passing of the Inflation Reduction Act and the implementation of favourable solar PV
manufacturing policies in the U.S. spurred multiple new project announcements in 2022
(see Figure 13).
Figure 13: Proposed Expansion Plans of Solar PV Module Manufacturers in the U.S.
12 4.5
4
10
3.5
Investment $billion
8 3
2.5
GW
6
2
4 1.5
1
2
0.5
0 0
First Solar Q CELLS Toledo Solar Meyer Mission 3Sun(Enel) SPI Energy
Burger Solar
Source: IEA
India’s Photovoltaic Manufacturing Capacity Set to Surge 32
First Solar, a leading solar PV manufacturer in the U.S., announced its plans to invest up to US$4
billion in increasing the production of American-made solar modules. This investment is forecasted
to expand the solar module production capacity in the U.S. to more than 10GW by 2025.16
In addition, Hanwha Q CELLS, a South Korea-based solar PV manufacturer, has announced that it
will invest more than US$2.5 billion to build a complete solar supply chain in the U.S. This is one of
the largest investments in the U.S. solar industry. The project will establish a fully integrated silicon-
based solar supply chain in the U.S. with an anticipated total production capacity of 9GW. 17
Figure 14: Projected Solar PV Module Manufacturing Capacity in the U.S. 2022–2030
50000 46500
45000
38500
40000
35000 33000
30000
MW(dc)
25000
20000
15000 12000
10000
5000 2500 3000
0
2022 2023 2024 2025 2026 2030
Source: SEIA
Currently, the U.S. has limited capacity to manufacture PV components like polysilicon, steel,
aluminium, resins and mountings. However, there is still a significant gap in the supply chain. In
addition, there is no domestic manufacturing capacity for solar ingots/wafers and cells, and only a
restricted capacity to produce solar modules. Thus, these segments require enhanced focus and
support to achieve 50GW of manufacturing capacity. 18
16
PV Magazine. First Solar to invest up to $1.2 billion to expand US solar output by 4.4 GW. August 2022.
17
Utility Dive. First Solar brings US manufacturing investment to $ 4B after selling out of panels through 2025. February 2023.
18
PV Magazine. Solar industry eyes 50GW of manufacturing capacity by end of this decade. August 2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 33
European Union
The European Union (EU) plans to scale up its solar PV-based electricity to meet its climate goals,
decarbonising its electricity grid and being less dependent on countries outside the EU, like China,
for solar PV components.
• In June 2013, the European Commission (EC) imposed anti-dumping duties on Chinese solar
panel components, including wafers and cells. A product is considered dumped if it is exported
to another country at prices lower than its normal value in its own domestic market.
• In May 2022, the EC announced the REPower EU plan, which responded to the energy hardships
caused by the Russian-Ukraine conflict. It aims to save energy, produce clean energy and
diversify energy supplies. It includes financial and legal measures to ramp up the new clean
energy infrastructure in the EU. 19
19
European Commission. REPower EU: affordable, secure, and sustainable energy for Europe. May 2022.
20
EIT InnoEnergy. EU Solar PV Industry Alliance sets target of 30GW of PV Manufacturing Capacity by 2025. December 2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 34
Figure 15: Proposed Expansion (by PV Segment) and Associated Investments in Europe by
2025
50 3.5
45 3.26
3
40
35 2.5
30
US$ billion
30 2.06 2
1.84
GW
25
20 20 20
20 1.5
15 1
0.87
10
0.5
5
0 0
Polysilicon Ingots/wafers Solar cells Solar modules
Establishing this proposed capacity in the EU requires a cumulative capex investment of ~US$8
billion across PV verticals. The highest share (around 40%) of this investment will go towards setting
up 30GW of polysilicon manufacturing.
30
25.4
25
20
GW
15
3.5
10
5 5
5 3.8 3.5
2.8
5 5 3.8 1.8 4 1.8 1.7 1 0.4
1.8 2.8 3.6
1.8 2.8 0.3 0.1
0
• German chemical producer Wacker Chemie AG (Wacker) has announced the expansion of its
polysilicon production capacity at its plant in Holla, near Trondheim, in Norway. Wacker is among
the top five companies in the world in polysilicon production and has approximately 28GW of
production capacity in Europe. It plans to roughly double its manufacturing capacity to 53GW by
2025.
• French Industrial start-up CARBON has declared that it will build a 5GW solar panel factory in
France by 2025 and then expand its production capacity to 15GW by 2030. 21
• In Sicily, Enel S.p.A is setting up a 3GW capacity for HJT-based bifacial modules. 22 It has set an
ambitious cell efficiency target of 30% for its facility.
• Companies like Norsan and Norwegian Crystal are setting up dedicated ingot/wafer
manufacturing units, and both are planning around 4GW of new capacity. Nexwafe also aims to
reach 3GW of manufacturing capacity in ingots/wafers by 2024–25.
Figure 17: Expected Global Market Share Growth of the EU by 2025 (% Segment Wise)
3%
Solar modules
5%
0.5%
Solar cells
4%
1%
Ingots/wafers
4%
11%
Solar polysiliocn
12%
Present By 2025
Various policies and the planned increase in PV manufacturing capacity in the EU will increase
production capabilities outside of China. By 2025, Europe will enhance its global market share in all
PV supply chain verticals. The increase is especially notable in the cells and ingots/wafers segments.
The market share of the manufacturing of polysilicon and solar modules will also increase by almost
1-2% for each.
21
Renewables Now. Solar start-up carbon plans 5-GW PV factory in France. March 2022.
22
Enel Green Power. The 3 Sun Gigafactory Story: Towards the Gigafactory in record time.
India’s Photovoltaic Manufacturing Capacity Set to Surge 36
120
110
100 94
82
80
Capacity (GW)
62
59 56
60 52
41
38 38
40
18 19
20
4.3 6.8
0
March 2022 March 2023 2023e 2024e 2025e 2026e
With ~72GW in the pipeline, the Indian module manufacturing capacity will reach around 110GW by
2026. Additionally, there is likely to be a similar growth rate in cell manufacturing capacity with
~52GW in the pipeline.
India’s Photovoltaic Manufacturing Capacity Set to Surge 37
With such a large expansion of PV manufacturing capabilities, there will be no dearth of domestic
modules in the market a few years down the line. As noted earlier in this report, Indian
manufacturers will then have the potential to meet domestic demand and cater to the export market.
Figure 19: Solar Modules Export from India: Trends and Major Export Markets
100 1%
80
60
40
20
0
Jan
Apr
Dec
July
Jun
Oct
May
Sept
Mar
Aug
Feb
Nov
93%
Solar Modules 2021 Solar Modules 2022 USA UAE South Africa
Afghanistan Mauritius ROW
All major PV importers around the globe are actively pursuing a “China+1” strategy to insulate their
PV procurements against future supply chain shocks that become unavoidable in certain cases due
to the concentration of manufacturing in just one country. Additionally, for some countries, such as
the U.S., geopolitical issues also impact decision-making regarding solar imports.
Naturally, with India having the second-largest module manufacturing capacity globally and
significant expansion plans, many countries are looking at India as a viable alternative to China for
their PV requirements.
India’s Photovoltaic Manufacturing Capacity Set to Surge 38
All leading GW-scale manufacturers in India are reporting considerable interest and demand from
abroad for their high-quality and high-wattage lines of modules. Thus, they are already earmarking
around 20–25% of their manufacturing capacity only for the export market. However, this may
inadvertently lead to shortages in the local market for high-quality modules in the short term.
Domestic manufacturers must also factor in the risk of lower overseas demand in the future as major
export destinations, such as the U.S. and Europe, are scaling up their PV manufacturing capabilities
and becoming self-sufficient.
Polysilicon Price
45
40
35 40
30
US$/kg
25
27 25.6
20
15
10 15.4
13
5 10.6
6.8
0
2020
2021
2022
2023e
2025e
2027e
2029e
With the polysilicon capacity set to almost double over the next few years, the recent glut in
polysilicon availability is nearing its end. Going forward, the polysilicon prices are expected to fall
back to their pre-pandemic levels, leading to a simultaneous easing in all PV component prices in
India as well.
23
PwC. PV Price Predictions: Assessment of solar power’s cost economics. December 2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 39
24
PV Magazine. Borosil expands solar glass capacity in India. January 2023.
25
IEA. Special Report on Solar PV Global Supply Chains. July 2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 40
Additionally, with PV technology constantly evolving, a significant capital influx is also necessary at
regular intervals for machinery upgradation and other maintenance-related tasks.
A manufacturing incentive disbursed right at the beginning (pre-construction) can potentially
alleviate any likely capital crunch initially, especially for small manufacturers.
26
Bloomberg. China Mulls Protecting Solar Tech Dominance With Export Ban. January 2023.
India’s Photovoltaic Manufacturing Capacity Set to Surge 41
27
CEA. Monthly reports archive. January to December 2022.
India’s Photovoltaic Manufacturing Capacity Set to Surge 42
7. Conclusion
The Indian PV manufacturing industry is growing by leaps and bounds. Every day, there are
announcements of expansion or new investments in the sector. Such a push towards the
manufacturing sector is partly due to the favourable policy scenario created by the Indian
government. Through both iterations of its PLI scheme, the government aims to catalyse the Indian
PV manufacturing landscape, especially for upstream components such as polysilicon and
ingots/wafers.
In addition to the PLI scheme, the Indian government has restricted the inflow of PV modules by
implementing various tariff and non-tariff barriers. These include a BCD on solar modules and cells
and mandatory listings for manufacturers in the ALMM.
However, even with aggressive market drivers and government support, many minor hiccups still
impede the development of the domestic PV manufacturing sector.
The biggest challenge is sustained reliance on China for its raw material. Almost all (around 95%) of
the upstream PV manufacturing capabilities, i.e. polysilicon and ingots/wafers, are still in China. With
the Chinese government mulling restrictions on the outflow of the critical technology used in the
manufacture of these upstream components, it is imperative for countries targeting integrated PV
manufacturing at scale to identify alternate sources of supply for these raw materials.
Despite the ALMM being one of the most important drivers for the domestic PV manufacturing
sector, the government deferred its implementation until March 2024 to address the concerns of
developers regarding the shortage of high-quality, high-wattage ALMM-listed domestic modules.
This led to a decline in solar installations in the last few months. While this announcement was a
major relief for developers, it will derail the future expansion plans of domestic PV manufacturers.
Moreover, as part of the long-term expansion plan, India must aim to build enough PV capacity to
satisfy local demand and maintain a healthy global presence to become a viable competitor to
Chinese PV products. However, India's current major PV export markets – the U.S. and Europe – are
ramping up their own PV manufacturing capabilities. In future, these countries may also potentially
become self-sufficient in PV manufacturing. As a result, there is a greater impetus to explore other
export markets for Indian tier-1 manufacturers.
To further augment the expansion of domestic PV manufacturing, the government can look at some
policy initiatives:
• The PLI scheme, which currently covers the polysilicon to module stages of the manufacturing
process, should also include other components in future iterations/tranches for the holistic
development of the PV manufacturing ecosystem. These include PV equipment machinery and
ancillary components.
• The Inflation Reduction Act implemented in the U.S. can be a possible inspiration for including
these components under the ambit of the PLI scheme.
India’s Photovoltaic Manufacturing Capacity Set to Surge 43
• To help relatively smaller manufacturers having limited capital availability, the government can
look at a scheme providing upfront subsidies for setting up manufacturing units.
To conclude, the future of the Indian PV manufacturing sector is bright. With around 110GW of
module capacity set to come online in the next three years, India will quickly become the second-
biggest PV manufacturing country. After attaining self-sufficiency, India's next course of action will be
to challenge and compete for dominance in both quality and scale on the global stage.
India’s Photovoltaic Manufacturing Capacity Set to Surge 44
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy
markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse,
sustainable and profitable energy economy. www.ieefa.org
Prabhakar Sharma
Prabhakar is a Consultant at JMK Research with expertise in tracking renewable energy and battery
storage sector. He has previously worked with Amplus Solar.
Nagoor Shaik
Nagoor is a Senior Research Associate at JMK Research, having five years of experience in the
renewable energy sector and worked with both public and private sector clients. He has previously
worked with Reconnect Energy Solutions Ltd. and PTC India Ltd.
Vibhuti Garg
Vibhuti Garg, Director, South Asia at IEEFA, has advised private and public sector clients on
commercial and market entry strategies, investment diligence on power projects and the impact of
power sector performance on state finances. She also works on international energy governance,
energy transition, energy access, reallocation of fossil fuel subsidy expenditure to clean energy,
energy pricing and tariff reforms. vgarg@ieefa.org
India’s Photovoltaic Manufacturing Capacity Set to Surge 45
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