India leads the way in solar energy, becoming the world’s second largest module manufacturer – pv magazine India

July 9, 2024 Captain Ishver Dholakiya, Founder and Managing Director, Goldi Solar

As the world grapples with the urgent need to combat climate change, demand for renewable energy has taken center stage. The Paris climate agreement and the G20 summits have mobilised nations to set ambitious decarbonisation targets, driving demand for solar energy. In the face of this global pressure, countries are competing to lead in solar module production, a key objective in achieving green energy targets.

China currently dominates the global solar module manufacturing landscape with unparalleled capabilities. Its supremacy is sustained by abundant raw materials, a robust supply chain, advanced technology, economies of scale, labor availability, and broad government support.

China’s module production capacity tripled in 2022, from 198 GW to about 562 GW, according to Wood Mackenzie, and grew another 84% to more than 1 TW by the end of 2023. The same report predicts China will have enough capacity to meet global demand by 2032.

Vietnam ranks second due to its growing production capacity and supportive government policies. Its strategic location and cost advantages have made it an attractive region for solar module production. In 2023, Vietnam’s production capacity was 70 GW.

India’s progress in solar module production

India is making significant progress in solar module manufacturing. The country has launched various initiatives such as the Production-Linked Incentive (PLI) programme and the Approved List of Models and Manufacturers (ALMM) to increase domestic manufacturing capacity and improve competitive advantage in the global market.

Despite progress, India still lags behind leaders like China and Vietnam. However, recent progress and strategic initiatives, including a Memorandum of Understanding (MoU) with the UAE and an evolving export strategy, are positioning India as the second-largest manufacturing region.

Wood Mackenzie’s November 2023 report highlighted that India is poised to become the world’s second largest solar module manufacturing region by 2025. This forecast is supported by India’s strategic initiatives and favourable policies to expand its manufacturing capabilities. India currently ranks third globally with a capacity of 64.5 GW and a 3% global market share.

This is because the Indian government has implemented supporting policies and initiatives under the Panchamrit Action Plan, which aims to generate 500 GW of power from non-fossil fuels by 2030. Prime Minister Narendra Modi’s Pradhan Mantri Suryodaya Yojana (PMSY) aims to bring rooftop solar panels to crore households. The government’s support includes ALMM listing, PLI scheme and 40% import tax on solar panels. Moreover, competitive labour and operating costs in India make it an excellent location for manufacturing solar modules. Industry stakeholders are supporting talent development through training programmes, internships and partnerships with educational institutions.

India’s Path to Leadership

India aims to reach 110 GW of solar module manufacturing capacity by 2025-26, which will give it an advantage over Vietnam but will still lag behind China. To close the gap with China and overtake Vietnam, India needs to focus on:

• Research and development: Indian companies should invest more in R&D to drive innovation in solar technologies.
• Increasing production capacity: India needs to scale up existing plants and build new ones to meet growing demand.
• Improving production efficiency: India needs to implement advanced manufacturing techniques, automate production, optimise logistics and reduce dependence on imported materials.
• Export strategy: India expands its export strategy with the United States becoming its largest buyer in 2023. ALMM will strengthen quality control, paving the way for global expansion.
• Development of infrastructure: India needs to strengthen its infrastructure by improving transportation, ensuring reliable power supply and improving logistics.

Application

To lead the global solar module manufacturing industry, India needs a comprehensive policy and regulatory framework that encourages innovation, attracts investment and expands manufacturing capabilities. Continued government support, coupled with strategic investments in technology and infrastructure, will be critical to realizing India’s renewable energy goals and cementing its position as a global leader in solar module manufacturing. With the right focus and sustained efforts, India is well on its way to riding the solar wave to the top of the global renewable energy landscape.