China First To Surpass 1,000 Gw Solar Capacity

India’S Solar Market Hits 100 Gw Module Capacity, Poised For 190 Gw By 2027 – Sbi Capital ReportIndia’s solar sector is undergoing a period of rapid growth, driven by strong government support and a favorable global environment. Over the past two years, the country has seen a significant increase in solar module manufacturing capacity, which has now reached an impressive 100 GW. This growth has been fueled by initiatives such as the Production-Linked Incentive (PLI) scheme and the Approved List of Models and Manufacturers (ALMM) program. These policies have helped India strengthen its position in solar manufacturing, resulting in a 60% year-on-year rise in solar energy additions in FY25, reaching around 24 GW. The high demand for modules has required roughly 50 GW of capacity to support new installations. With targets of installing 40-50 GW annually in the coming years, maintaining a steady-state module capacity of 100 GW is essential. Despite this expansion, there are potential challenges on the horizon. India’s projected solar manufacturing capacity of 190 GW by 2027 could create an oversupply situation. This is partly due to declining export opportunities, especially to the United States, where new regulations have phased out incentives for solar projects. In response, some Indian manufacturers are considering establishing onshore facilities in the US to remain competitive in the global market. While module production is growing strongly, the country’s cell manufacturing capacity is still catching up and currently stands at less than 30 GW. To address this gap, the government has introduced ALMM-II for cells. This policy requires the use of domestically produced cells for projects with bid submissions after August 31, 2025, including those under net metering or open-access rules. By applying to commercial and industrial (C&I) projects, this policy will provide a boost to domestic cell manufacturers and help India move toward self-sufficiency in the medium term. However, higher prices for domestically sourced cells could temporarily increase project costs and affect bid activity until the market adjusts. To ease this transition, approximately 100 GW of projects bid since December 2024 are exempted from the new requirements, providing a buffer against immediate price increases. Further up the supply chain, India’s domestic presence in wafers and polysilicon remains minimal, with China continuing to dominate these markets. India aims to achieve nearly 40 GW of wafer manufacturing capacity by March 2027, but progress has been slow. A new rule clarifying that only cells made from “blue wafers” will qualify as domestic is a positive development. Meanwhile, the global polysilicon market has experienced volatility, with prices surging 35-40% following China’s plan to shut down a significant portion of its production. This has placed pressure on global players who lack full integration from polysilicon to module, highlighting the advantage of India’s PLI scheme, which encourages complete integration and gives Indian manufacturers a competitive edge. Overall, Indian solar companies are performing better than many international peers in terms of margins and growth. Integrated manufacturers are particularly well-positioned to manage input costs and benefit from the tight supply of cells, while standalone module makers may see more variability in returns. This has prompted some companies to diversify into related areas, including inverters, battery storage, and independent power production. Although current policies and strong demand have created a “golden period” for the Indian solar industry, there remains a long-term question about whether the sector will eventually experience cycles similar to those seen in policy-driven industries like steel. The combination of government incentives, domestic manufacturing expansion, and global market dynamics has positioned India as a key player in the solar industry. The coming years will be crucial in determining whether India can balance supply and demand, achieve self-sufficiency in cells, and sustain long-term growth while navigating potential challenges in exports and cost pressures. Subscribe to get the latest posts sent to your email. Type your email… Subscribe

Solar Quarter

powerplant

25 August 2025

4 min read

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China First To Surpass 1,000 Gw Solar Capacity

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