India’s domestic solar module manufacturing capacity is expected to witness a 62% increase by 2025, according to a new report by investment and credit rating agency ICRA. The report states that from the current 37 GW, the capacity is likely to cross the 60 GW mark because of the improved backward integration into cell and wafer manufacturing.
Moreover, the report also reveals that the manufacturing capacity can further reach 100 GW once the projects awarded under the production-linked incentive (PLI) scheme come online.
Additionally, the wafer and cell manufacturing capacities will likely cross 25 GW by 2025, from the current 6 GW, according to Vikram V, vice president & sector head of corporate ratings, ICRA.
The government of India has so far, provided incentives for setting up a module manufacturing capacity of 48 GW, including 24 GW of fully integrated facilities (polysilicon to module). The estimated capital investment for developing these integrated capacities is expected to exceed ₹1 lakh crore.
The main drivers of this growth are the policy changes introduced by the Indian government, including ALMM, the imposition of basic customs duty on imported cells and modules, and the PLI scheme.
Moreover, in alignment with India’s climate transition objectives and the mounting demand for PV modules, the nation’s solar power generation capacity is poised for significant expansion in the next decade.
“The Indian module manufacturers have benefited from the healthy export demand growth, mainly from the US, over the past 18 months. The exports increased by over 364% in FY2023 over FY2022 and further by 748% in the first five months of FY2024 over the corresponding period of the previous year. This is owing to the healthy demand from the US and restrictions imposed by that country on module sourcing from China,” added Mr. Vikram.
Notably, a report from September indicated a remarkable 110% growth in India’s PV module manufacturing capacity over the past year. Furthermore, the Ministry of New and Renewable Energy (MNRE) has set a target of achieving 100 GW of module manufacturing capacity by 2026.
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Resource: ET Energy
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