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Informist, Wednesday, Sept. 24, 2025

 

MUMBAI – Domestic solar module manufacturing capacity is expected to surpass 200 gigawatt-peak by the financial year 2027-28 (Apr-Mar), nearly four times the average annual module demand of 50–60 gigawatt-peak, supported by planned capacity additions of more than INR 140 billion, CareEdge Ratings said in a report Wednesday. Similarly, cell manufacturing capacity is expected to reach 100 gigawatt-peak during the same period, with capital expenditure exceeding INR 550 billion, driven by backward integration efforts, the rating agency said. Watt-peak is a measure of peak output under standard operating conditions.

 

With this, the agency expects module production to increasingly rely on exports, as solar cell production is expected to surpass domestic demand in the medium term. "While pureplay module players could be at risk of consolidation, integrated players are likely to withstand the margin pressure owing to cost efficiencies," CareEdge said.

 

The agency noted that the shift in US trade policies could have an impact on exports of domestic modules, although "the medium-term outlook remains promising, provided Indian players manoeuvre compliance and maintain cost competitiveness." In FY25, over 95% of module exports from India were to the US. 

 

Further, the recent reduction in goods and services tax rates is expected to lead to project cost savings of 4-5% owing to a reduction in landed costs of non-domestic content requirement and domestic content requirement modules by 1.0-1.2 cents per watt-peak. This is expected to bring down plain vanilla solar tariffs by INR 0.06–INR 0.10 per unit in the near term, CareEdge Ratings said. However, the mandatory domestic cell procurement under the approved list of models and manufacturers for solar cells is likely to push plain vanilla solar tariffs higher by INR 0.30-INR 0.40 per unit from the current INR 2.50 per unit, it noted.

 

As of July, the domestic module manufacturing capacity was 118 gigawatt-peak and cell manufacturing capacity was 27 gigawatt-peak, the report said. However, the effective operational capacity is estimated at 80-85 gigawatt-peak for modules and 11-13 gigawatt-peak for cells, with the rest in stabilisation phase, the agency said. Consequently, the annual production is estimated at 50-60 gigawatt-peak for modules and 8-10 gigawatt-peak for cells, resulting in an import dependency of 40-45 gigawatt-peak for cells.  End

 

Reported by Arya S. Biju

Edited by Rajeev Pai

 

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