India's efforts to localize the solar energy industry are facing real difficulties. According to Reuters report on July 23, due to insufficient supply of solar cells in the country, several photovoltaic component manufacturers in India have been forced to stop production or reduce output. Some companies have had to wait up to 8 months for domestic solar cells. Industry experts warn that this issue could hinder India's clean energy goals by 2030.
According to reports cited by the Association of Solar Cell Manufacturers in India (AISIA), approximately one-third of the 140 small and medium-sized solar cell manufacturers in India have suspended production. These companies account for about 60% of India’s photovoltaic manufacturing capacity. The remaining companies have also reduced their production cycles to once every 3 to 4 days.
Manufacturers without their own battery production facilities say they need to wait for six to eight months to obtain domestic batteries. This means that the cost of solar panels using domestic batteries is almost twice that of panels using Chinese batteries.
The Indian government previously required that starting from June 1 this year, solar projects must use domestically produced solar cells that meet the requirements, in order to reduce dependence on imported products. However, due to insufficient production capacity for domestic solar cells in India, companies have faced a dilemma of having component production capacity but no available solar cells.
New Delhi in India implements new energy initiatives; solar panels installed at temporary settlements along the Amuqaran River. IC Photo
Indian photovoltaic component manufacturer Icon Solar's chairman, Shalendra Shukla, stated that the company has been severely affected by a shortage of domestic solar cells over the past three months. It is expected that this year's production will drop significantly from 3.2 billion watts to approximately 1 billion watts.
Data shows that India currently has a capacity to manufacture photovoltaic components of approximately 200 GW, but the production capacity for solar cells is only about 27 GW. The actual operating capacity is even only between 16 billion and 18 billion watts. According to analysis by the German research institution EUPD Research, it may take India 3 to 5 years to fill the gap in battery supply.
For a long time, India's photovoltaic industry has been highly dependent on the Chinese supply chain. Industry data shows that about 95% of solar cells imported into India come from China. In the last fiscal year, imports increased by 37%, reaching approximately 1.86 billion US dollars.
The report indicates that India hopes to reduce its dependence on China by developing domestic manufacturing. However, building solar cell factories requires substantial funding, technical cooperation, and a long debugging period. At the same time, China plays a leading role in the global solar manufacturing equipment and technology field. Indian companies believe that restrictions on the export of related technologies and equipment by China also increase the difficulty for India to expand its production capacity.
Indian solar companies warn that shortages of solar cells are driving up costs, delaying project construction, and could affect India's goal of achieving 500 GW of non-fossil fuel capacity by 2030. Currently, India has approximately 288 GW of non-fossil fuel capacity, of which solar energy accounts for about 29%.
Industry insiders say that before the capacity of domestic battery production increases, the cost of solar projects in India may increase by about 35%. Additionally, companies that rely on photovoltaic manufacturing are also facing employment pressures. In just Gujarat state in India, component companies lacking battery production capabilities are involved in around 45,000 jobs.
