Indigenous solar cells to meet half of overall demand in FY27, says report
This story was originally published at 15:27 IST on 18 June 2026
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NEW DELHI – India's indigenous solar cells are expected to account for about half the overall demand in the financial year 2026-27, up sharply from a quarter in FY26, according to a study by ratings agency Crisil Ratings Ltd. This growth will be driven by the government's push to reduce import dependence, suppoted by a strong ramp-up in solar cell manufacturing capacity, the ratings agency said.
The shift follows the Ministry of New and Renewable Energy's move to mandate the use of domestically manufactured solar cells through the Approved List of Cell Manufacturers from June 2026. The approved list of cell manufacturers is mandatory for utility-scale projects with bid submission dates after Aug. 31, 2025, and for net metering and open access projects commissioned after Jun. 1, 2026.
"The ALCM (approved list of cell manufacturers) will sharply reset India's solar cell supply mix. Domestic supply will gain share and meet around half of the 60-65 GW (gigawatt) demand this fiscal, with imports making up for the rest," Manish Gupta, deputy chief ratings officer, Crisil Ratings said, adding that as the earlier project pipeline winds down, import dependence should fall materially starting FY28.
With rising demand and anticipated reduction in imports, several manufacturers are undertaking capital expenditure to set up or expand solar cell manufacturing capacities, the ratings agency said. Net-net, such capacity is expected to nearly double to around 60 GW by the end of FY27, with further additions likely in FY28, according to the press release.
"Capacities commissioned by the end of this fiscal (FY27) could see payback periods stretch by 1-2 years, compared with the 4-5 years it took the early movers integrating backward to solar cell manufacturing. These early movers benefited from higher premiums and 50-60% capacity utilisation after stabilisation - advantages that are likely to narrow as fresh capacity comes on stream," Ankit Hakhu, director, Crisil Ratings, noted.
A key monitorable is the risk of weaker solar module demand arising from delays in power purchase agreement signings, according to the rating agency. End
Reported by Astha Oriel
Edited by Avishek Dutta
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