COVER STORY: India’s Different Path For Solar Module Manufacturing

COVER STORY: India's Different Path For Module Manufacturing

On February 17, the Ministry of New and Renewable Energy (MNRE) issued its latest ALMM (Approved List of Models and Manufacturers) list. The issuing of the much-awaited list has been increasing in frequency over the year, as the rate of addition of new firms and module manufacturing capacity picks up pace.

From just 26 manufacturers accounting for 8.3 GW of approved capacity in the list in August 2021, the enlisted number today has climbed to 67.17 GW spread over 97 solar modules manufacturing entities from India. In the time since March 2021, when the ALMM list was formalized as a formal compilation of acceptable manufacturers with approved capacities, besides a non-tariff barrier from Chinese competition mostly, getting on to the list has become critical for anyone trying to do business in India. For the record, total capacity in China crossed 1 Terawatt (1000 GW) in 2024.

The rapid expansion has followed a slew of measures taken to support domestic manufacturing, from import duties to centrally sponsored incentives like the PLI scheme and state-level incentives, besides of course the tightening of ALMM requirements for virtually all solar projects with a few exceptions like Green Hydrogen projects, etc.

The four-year journey from less than 10 GW to over 70 GW manufacturing capacity has been achieved by the industry through a lot of hard work with legacy players as well as new entrants overcoming challenges linked to technology, skills training, warehousing and logistics to expand. They have also benefited from a vastly improved market for funding as seen in the raft of solar IPOs in the past year, with more waiting in the wings. However, for all the growth, India’s solar trajectory has a few unique characteristics that provide a pointer to the likely shape of the sector in the coming years.

Developers turn module makers 

Perhaps the most interesting aspect of the rush in the past four years has been the emergence of developers as manufacturers. While this was a phenomenon never quite absent from the country, where manufacturers turned developers seeking a market, the story has reversed now. Virtually all of India’s top 5-7 developers have turned manufacturers as well to ensure the security of supplies for their projects. For most, the price volatility post-2020 was too much to digest. Also, developers have traditionally had better access to capital, making the decision far easier for them.

While not unusual in other key solar markets like China, the US, or even the EU at various times, the trend of developers into manufacturing has played out by now, even as the trend in India is still picking pace, making it stand out.

While Tata Power, or even Adani Group, which has a separate developer arm Adani Green Energy, were already on this path, it is the addition of firms like Nasdaq-listed ReNew,  led by Sumant Sinha, which has started module and cell manufacturing within two years of announcing plans, that is notable. ReNew has led other major developers like

Vineet Mittal-led Avaada through its subsidiary Avaada Electro, that have chosen to get into manufacturing as well. Avaada’s first 1.5 GW of a planned 5 GW integrated solar module and cell line in Greater Noida was inaugurated by the Uttar Pradesh Chief Minister Yogi Adityanath earlier this month.

Solar module manufacturing capacities of key players globally. Source: Williamkamkwamba

Similarly, listed solar project developer ACME Solar also forayed into solar module manufacturing with its 1.2 GW solar module manufacturing plant in Rajasthan.

Nikhil Dhingra

Nikhil Dhinga, CEO of  ACME Solar stresses that besides better control over the supply chain, having a finger in manufacturing also helps the firm spot critical price trends better.

Among EPC companies, Waaree Renewables obviously has access to the highest module manufacturing capacity through parent  Waaree Energies, which has around 15 GW of solar module manufacturing capacity, though in many cases the decisions on the choice of panels (either in-house or third-party) are based on client calls.

New Entrants and Diversification 

Even as China is going through a painful shakeout with many tier 2 and 3 solar players expected to die out by the year-end, the story in India is quite different. Legacy players are expanding massively, doubling or adding even more to capacities, while also seeking further backward integration. New entrants are still announcing, and firming up plans to make a splash in the sector. At a time when many thought the industry would consolidate, the rush into solar has one saving grace. No one is going for sub-optimal 500 MW or lower capacity creation. It would seem like it’s all GW plus or nothing now.

Praful Radadiya

For example, Surat-based Army Looms and Textiles was earlier confined to the textile business from the state. However, it has now planned to create its own niche in the Indian solar module manufacturing industry.

“We are a reputed name in the textile business. Now we have decided to start solar module manufacturing from Surat using the brand name

Army Solar. We want to take up our total production capacity upto 3 GW in the next three years. Initially, we plan to start with a capacity of 600 MW. These will be mainly TOPCon-based modules,” Praful Radadiya, Co-Founder of Army Solar told Saur Energy.

It’s a similar story at Solitech, another new entrant to the industry, which is set to come up with 2 GW of TOPCon-based module plant in Gujarat. Hardik Ramani, Managing Director (MD) of the firm says

Hardik Ramani

“Unlike other trades, solar module manufacturing is more arduous as it is capital intensive and also demands skilled manpower. This is also a relatively new emerging market. Bolstered with the good prospects, we have invested in the sector and are hopeful of good returns,” he said.

The solar module production capacity is now on the rise. Source: SBI Caps Report

However, besides the solar developers and new entrants, some green tech companies are also finding the solar module business more lucrative. Take the example of Knack Energy. The company, which was earlier into the manufacturing of backsheet, EVA and other key solar components, recently started its solar module manufacturing two months ago. While it has just started with a capacity of 800 MW it has planned to add 1.2 GW of new solar module manufacturing capacity soon.

Ravi Patel

“Earlier we were into EVA, POE, backsheet and other related productions. We recently started our new solar module manufacturing business and aim to expand. While we can see rising domestic demand, the industry also sees the government support through interventions like ALMM and others which allows domestic companies like ours to create their own space in the market,” Ravi Patel, Director of Knack Energy told Saur Energy.

According to the admissions of the solar module manufacturing companies, setting up a 1 GW solar module unit requires an investment of anywhere between Rs 120 crore and Rs 150 crore, with costs going 3x higher for a cell manufacturing plant. With MNRE announcing the starting ALCM for solar cells in June 2026, many of the new companies are not only planning for solar module manufacturing but also solar cell manufacturing now.

For example, Krivi Energy has planned to start TOPCon-based solar module manufacturing soon. However, it has also planned to start solar cell manufacturing in 2026 or 2027 after an Initial Public Offering (IPO), Raj Bhalala, MD of the firm told Saur Energy.

Raj Bhalala

Bhalala said that it is not only the domestic market, that empowers the Indian solar module makers to increase their capacity, but the international market also has opened new opportunities for the Indian solar module makers, which offer a better price in the global market, especially the United States (US). While the US continues to remain the primary target for Indian solar module exports, several other firms have looked toward the Middle East, African countries or European countries too.

For many of the smaller players, it is the opportunities in rooftop solar, or government-backed schemes like PMKUSUM for solar pumps, besides off-grid solar that seem attractive.

With China, the world’s largest solar module-making country facing resistance due to tariffs and blockades in key markets, especially the US, many Indian solar module makers see an opportunity for exports. As per a report from the Institute of Energy Economics and Financial Analysis (IEEFA), in Fiscal Year (FY) 2024, Indian PV manufacturers exported approximately US$2 billion worth of PV modules. The export value of PV modules from India increased by more than 23 times in just two years between FY2022 and FY2024. Till the Trump Presidency came into the picture, many expected India’s exports to rise as high as $5 billion possibly by 2028.

Until FY2024, three of the largest domestic PV manufacturers – Waaree Energies, Adani Solar and Vikram Solar – accounted for most of India’s PV exports with players like Emmvee building a strong reputation for quality as well. Many of these exported more than half of  annual actual production in FY2024. Several other Indian PV manufacturers, like Grew Energy, ReNew Power, Navitas, Solex Energy and Saatvik Energy, are pursuing export markets and setting up supply chains abroad.

Most Indian PV exports are to the US, which accounted for 97% and 99% of India’s PV exports in FY2023 and FY2024, respectively. India also exports PV products to South Africa, Somalia, Kenya, the UAE, Afghanistan, Nepal, and Bangladesh.

The exports from Indian solar module makers are significant. Source: SBI Caps Report

Destination Gujarat For Solar Manufacturing

The concentration of solar manufacturing in Gujarat was assuming extraordinary proportions till 2023. It is only in 2024 that we have seen a little diversification away from the state towards other states like Odisha, Andhra Pradesh and Tamil Nadu.  Gujarat’s advantages of access to markets, ports, quality infrastructure, openness to manpower from outside and state-level incentives has worked like a charm.  In this respect, Gujarat is a lot like China’s Jiangsu province, which is a key solar hub in that country.

As per the latest ALMM list of MNRE, of the  97 enlisted solar module makers a total of 34 of them are from Gujarat alone. Others belong to Uttar Pradesh, Telangana, Tamil Nadu, Karnataka and other regions.

Within this list as well, the firms with the largest capacities as well as planned capacities, ie, the big three of Waaree Energies, Adani Solar, and Reliance New Energy, are all based in Gujarat.  Waaree’s only plant outside Gujarat is a firm it acquired.

“Such (state) policies typically provide a framework for the governance of the solar power industry and projects, procedures for the undertaking of bids, terms of the renewable purchase obligations, connectivity to grid lines and the measures to be taken to promote the development of solar power in the state, including incentives to manufacturers such as grants of concessions on certain taxes, research and development initiatives. For example, we have been granted incentives under the Electronics Policy (2016-2021) of the Government of Gujarat, wherein we have been granted capital subsidy,  reimbursement of stamp duty and registration fees, interest subsidy and power tariff incentives,” read out the RHP of Waaree Energies.

Gujarat is also home to the largest planned solar park in India, the 30 GW planned at Khavda. The state also leads in rooftop solar by a huge margin, accounting for over 60% of connections last year to justify its top ranking.

Majority of the solar module makers listed under ALMM are from Gujarat.

Conclusion 

There is little doubt that the solar market, and by extension the solar module market in India is booming. The entry of solar developers, solar component makers and the new players indicates the high potential these firms see.

A comparison with China should make many consider the risks as well.  Beijing’s “capitalism with Chinese characteristics” is about state-led efficiency, export dominance, and party control—capitalism as a tool for national power. India’s version feels more organic, less engineered—capitalism as a sprawling bazaar, not a sleek factory. India’s manufacturing is nowhere close to 100% integration in China.  It’s less about grand design and more about improvisation.  Especially when we consider how Indian firms remain dependent on China for everything from wafers (for cells) to the machines to make in India.

In fact, a stark difference is the difference between the top Indian firms and Chinese majors in investing in R&D for solar. That pretty much assures China a vice-like grip on the future shape of the industry, short of a breakthrough innovation outside China. Add in lower electricity costs in China (upto 30% lower than in India), and one can understand the 50% higher production costs in India

From academic partnerships to patents granted worldwide, the dominance of Chinese firms is probably as high in the solar sector as it can ever get in an industry. India’s solar hopefuls, if they truly want to be a serious no. 2 with an ability to compete, have a long way to go before they can catch up. In many ways, India today is where China was in 2019, without the research and intellectual heft that is so needed for the next big jump. Perhaps, more than a PLI scheme for manufacturing, it needs an RLI or Research Led Incentive scheme for its top universities and firms to prove their mettle in solar research.