The Rapid Rise of Solar Panel Manufacturing in India

• Published
• By Anupam Nath

India's solar panel production sector is experiencing unprecedented growth, positioning the country as a major global player in renewable energy manufacturing. Companies like Adani and Tata are operating 24/7 factories to meet surging demand. This expansion is fueled by government incentives, including production-linked incentives (PLI) schemes and import duties on foreign modules. Domestic manufacturing capacity has skyrocketed, with projections indicating it will soon surpass 125 GW annually. Major players are investing billions in vertically integrated facilities that cover everything from polysilicon to final modules. This boom not only creates thousands of jobs but also strengthens India's position in the global supply chain for clean energy technologies.

'Make in India' Driving Reduced Dependence on China

The 'Make in India' initiative has been instrumental in decreasing India's heavy reliance on Chinese solar imports. Historically, over 80-90% of solar cells and modules came from China, creating vulnerabilities in supply chains and exposing the sector to geopolitical risks and price fluctuations. Through targeted policies like Approved List of Models and Manufacturers (ALMM) and tariffs, domestic production has ramped up significantly. Imports of PV cells and modules from China have dropped notably in recent years, with local output filling the gap. Adani Green Energy and Tata Power Solar are leading examples, building mega-plants that produce high-efficiency panels competitively. This shift enhances energy security, boosts exports potential, and aligns with India's self-reliance goals in critical sectors.

Current Energy Mix: Coal Still Dominates at Around 75%

Despite the solar momentum, coal remains the backbone of India's electricity generation. As of recent data, coal-fired power accounts for approximately 75% of the total power mix, though this share is gradually declining. In 2025, coal power generation fell by about 3%, marking a rare drop as renewables surged. India's total installed power capacity exceeds 400 GW, with coal plants providing baseload reliability essential for industrial growth and peak demand. Renewables, including solar and wind, now contribute a growing portion, but intermittency issues mean coal plants often run at minimum loads to maintain grid stability. The transition is underway, but full replacement of coal will require massive investments in storage, grid upgrades, and flexible generation sources.

Solar Capacity Projections: Crossing 125 GW and Beyond

India's solar ambitions are bold. Installed solar power capacity has already reached impressive levels, with over 135 GW reported in recent updates, and additions accelerating. Forecasts suggest annual additions could exceed 40-50 GW in coming years, pushing total renewable capacity toward 500 GW by 2030, with solar forming the largest share at around 280 GW. Manufacturing capacity is outpacing installation in some projections, soon exceeding 125 GW annually. This overproduction capability positions India to potentially become a net exporter of solar modules, rivaling China in certain segments. Government targets under the National Solar Mission and updated Nationally Determined Contributions (NDCs) emphasize this aggressive scaling to combat climate change and reduce emissions.

The Risk of Overcapacity in Solar Manufacturing

While the manufacturing boom is commendable, it carries the serious risk of overcapacity. With production potential soon tripling current domestic demand, analysts warn of a potential shake-up in the industry. Domestic consumption, driven by installations, may not absorb the full output immediately, leading to idle plants, price wars, and financial strain on smaller players. Reports from consultancies like Wood Mackenzie and ICRA highlight that over the next 3-5 years, consolidation is likely, with vertically integrated giants like Adani and Tata better positioned to survive. Excess capacity could result in dumped prices or reliance on exports, which face global trade barriers such as tariffs in the US and Europe. Balancing supply with demand will be crucial to sustain healthy growth.

Balancing Growth with Sustainability and Grid Challenges

The solar expansion must address practical challenges beyond manufacturing. India's grid infrastructure needs modernization to handle variable renewable input effectively. Energy storage solutions, such as batteries, are emerging but remain costly and limited in scale. Overcapacity in panels contrasts with potential underutilization if installations lag due to land acquisition delays, financing issues, or policy inconsistencies. Moreover, while solar reduces carbon emissions, the lifecycle impacts—including mining for rare materials—require careful management. A holistic approach integrating solar with hydro, wind, nuclear, and green hydrogen will ensure a resilient energy future.

Opportunities for Exports and Global Leadership

India's solar manufacturing prowess opens doors to global markets. As Western countries impose restrictions on Chinese products, Indian modules gain competitiveness through quality improvements and lower geopolitical risks. Export-oriented units are being set up, and with 'Make in India' branding, the country could capture significant market share. This not only generates revenue but also positions India as a leader in the clean energy transition, supporting global net-zero goals. Collaborations with international firms for technology transfer further enhance capabilities.

Conclusion: Navigating the Solar Revolution

India's solar panel production surge represents a transformative moment in its energy journey. Driven by visionary companies and supportive policies, it reduces import dependence, creates economic value, and accelerates decarbonization. However, with coal still dominant and overcapacity looming, strategic planning is essential. By addressing grid flexibility, storage needs, and market balance, India can turn this boom into sustainable, long-term success. The path ahead blends ambition with pragmatism, ensuring clean energy powers a prosperous future for billions