INTRODUCTION

India is the fifth-largest economy in the world with the ambition and aspiration to become the third-largest economy. With dreams in hearts and potential in veins. A critical question arises: will the solar industry act as the genie to propel this transformation? The answer lies in India’s growing renewable energy sector. It's ranked fourth globally in both wind power and solar power capacity.

India's journey in the solar power sector exemplifies its role as an inspiring global leader in renewable energy. The country has seen remarkable growth in solar capacity, increasing from 72.02 GW in October 2023 to 92.12 GW in October 2024, showcasing its commitment to sustainable energy solutions. Its ambitious targets are pivotal in the global fight against climate change. Intending to achieve net zero carbon emissions by 2070 and to meet 50% of its electricity requirements from renewable sources by 2030. This surge and intent is a testament to India's ability to harness its vast solar potential, driven by the nation's size, increasing energy demands, and strategic investments.

WHY SOLAR ENERGY?

India is blessed with abundant solar energy resources, receiving about 5,000 trillion kWh per year across its land area. Most parts of the country receive 4-7 kWh per square meter per day, providing a strong foundation for large-scale solar energy development. This vast potential has placed solar energy at the heart of India’s renewable energy strategies. With that level of potential, we embark on the journey of increasing employment, foreign investment opportunities, and domestic manufacturing. It will help the nation avoid the dependency on China.

Building Blocks of Solar and Why China Leads

Solar panel production involves a multi-step process, including the manufacturing of polysilicon, ingots, wafers, solar cells, and solar modules. With great strategic ability and planning, China emerged as the undisputed global leader in today's era.

When most countries in 2009 focused on subsidizing solar panel purchases, China directed heavy subsidies toward solar manufacturing making the China solar hub of manufacturing today. This early investment has positioned China decades ahead, creating a robust ecosystem and achieving economies of scale that no other country has matched.

Interestingly, According to the research unit of Europe:

China produces solar panels at 16 to 18.9 cents per watt, far cheaper than 24.3 to 30 cents in Europe and 28 cents in the USA. China's model is approximately 50% cheaper than Europe's.

In understanding the solar panel manufacturing industry, it's important to highlight the backbone of the sector, polysilicon.

• Of the 9 billion tonnes of silicon produced globally, China accounted for 6.6 billion tonnes in 2023.
• 83% of the world's polysilicon is produced by China, exemplifying its dominance.
• India, by contrast, produced a mere 60,000 tonnes and is 100% dependent on imports for wafers, with virtually no production capacity for polysilicon, ingots, or wafers.

Growth Trajectories

China's solar manufacturing industry is expanding at a CAGR of 38%, compared to the industry's combined rate of 26%. This rapid growth consolidates its dominance further, making it a key player in the renewable energy supply chain.

India's Challenge and Opportunity

For India, these figures underscore both a challenge and an opportunity.

• India must address its dependency on imports, particularly from China, by investing heavily in the production of polysilicon, ingots, and wafers.
• Policies similar to China's 2009 approach—focusing on manufacturing rather than consumption subsidies, protecting domestic manufacturers—can help India build its capacity and compete on a global scale.
• With supportive initiatives like PLI schemes (Production Linked Incentives) and increased focus on domestic manufacturing, India can begin to reduce its import dependency while creating a sustainable solar manufacturing ecosystem.

Indian Government's Role in Promoting the Solar Industry and Protecting Domestic Companies

The Indian government has taken significant steps to promote the solar industry and safeguard domestic manufacturers from external competition. Through policy interventions, incentives, and protective measures, the government aims to boost domestic production, ensure affordability, and reduce reliance on imports.

1. Domestic Content Requirement (DCR) Mandate

The Domestic Content Requirement (DCR) policy mandates the use of Indian-made components for projects seeking government grants or subsidies.

• Implementation: For example, if a school wants to build a solar-powered charger with government funding, it must use parts manufactured in India.
• Objective: This ensures a robust market for domestic manufacturers, encouraging local production and reducing import dependency.
• The Ministry of New and Renewable Energy (MNRE) has mandated the use of the DCR Verification Portal (operated by the National Institute of Solar Energy (NISE)) for solar PV modules to ensure the authenticity of domestically manufactured solar products.

2. Performance-Linked Incentive (PLI) Schemes

The PLI schemes are designed by the Ministry of New and Renewable Energy (MNRE) to incentivize domestic manufacturers to enhance production capacities and improve efficiency.

• Objective: To establish an integrated domestic solar PV manufacturing ecosystem in India, covering the complete supply chain from polysilicon to solar modules.
• Funding Allocation: The government initially allocated ₹4,500 crore in 2021, which was later increased to ₹19,500 crore in 2022 due to the scheme's overwhelming success and demand.
• Incentives Offered: Manufacturers are rewarded and incentives are linked to the capacity of manufacturing, local value addition, and module performance (high efficiency and low degradation rates).
• Encouraging Innovation: The incentives encourage manufacturers to focus on research and development, ensuring India remains competitive in global markets.

3. Protective Tariffs on Imports

To protect domestic players from external dumping, the government has imposed heavy import duties on solar components:

• 40% on Solar Modules
• 25% on Solar Cells
• Impact: These tariffs discourage excessive imports, particularly from China, and create a level playing field for Indian manufacturers.

4. Subsidy Schemes Under PM-SGY

PM Solar Grid Yojana (PM-SGY)

• Objective:
  Promoting large-scale solar energy integration into the national grid.

1. This scheme is part of India's commitment to renewable energy adoption, contributing to energy security, sustainability, and economic growth.
2. Contribute to India's target of achieving 280 GW of solar capacity by 2030 as part of its renewable energy commitments.

• Establishing Solar Power Plants:
  Supporting the development of grid-connected solar farms and floating solar projects to boost renewable energy supply.
• Strengthening Grid Infrastructure:
  Upgrading grid systems to handle intermittent solar energy and integrating smart technologies for efficient energy management.

India is blessed with abundant solar energy resources, receiving about 5,000 trillion kWh per year across its land area. Most parts of the country receive 4-7 kWh per square meter per day, providing a strong foundation for large-scale solar energy development. This vast potential has placed solar energy at the heart of India’s renewable energy strategies.

5. Rooftop Solar Scheme (PM Surya Ghar Muft Bijli Yojana)

Prioritizing the residential India and targeting to generate clean energy driving affordability and inclusivity. Through net metering provides an opportunity to earn and create an interdependent society culture.

• Objective:
  Encourage residential consumers to install rooftop solar panels by providing financial assistance.
• Incentives:

1. Up to 40% subsidy for solar panel systems up to 3 kW capacity.
2. 20% subsidy for systems between 3-10 kW.
3. No subsidy is provided for capacities above 10 kW or for commercial and industrial consumers.

• Implementation Through DISCOMs:
  The program is implemented by state DISCOMs (distribution companies), which manage applications, subsidies, and installation processes.
• Simplified Application Process:

1. Consumers can apply online through a centralized portal or their respective DISCOM websites.
2. Real-time tracking of application status and subsidy disbursement.

• Net Metering:
  Households can sell excess electricity generated back to the grid, earning credits or payments

By harnessing this clean and abundant resource, the Government of India is not only addressing its energy needs but also making a significant contribution to the global fight against climate change.

Leading Indian Companies in Solar Manufacturing

India's solar manufacturing sector is witnessing rapid growth, driven by companies that aim to bolster the country's self-reliance and reduce dependence on imports. These leading players are not only increasing domestic capacity but also focusing on advanced technologies and integrated production processes.

1. Adani Solar (Mundra Facility)

With a production capacity of 4 GW, Adani Solar is a major force in India's solar landscape. Its integrated solar manufacturing facility at Mundra covers the entire value chain, from polysilicon to modules, reflecting a commitment to self-reliance and cutting-edge technology.

• Backward Integration: Adani Solar’s focus on backward integration ensures cost efficiency and strengthens its global competitiveness.
• Strategic Vision: By incorporating advanced technologies, Adani aims to position itself as a global leader while addressing India's energy transition goals.

2. Vikram Solar

With a production capacity of 3.5 GW, Vikram Solar is known for its high-efficiency modules and a strong emphasis on research and development.

• Innovation and Quality: The company is recognized for its advanced solar technology and adherence to global quality standards.
• Global Aspirations: Vikram Solar’s expansion plans aim to position the company as a global leader, leveraging its robust R&D capabilities to stay ahead in the market.

3. Waaree Energies

Waaree Energies, with an impressive capacity of 13.3 GW, is India’s largest solar module manufacturer and a leading player in the global market.

• End-to-End Integration: Waaree focuses on producing ingots, wafers, solar cells, and panels, ensuring supply chain security and reducing dependency on imports.
• Export Leadership: A significant portion of its production is exported, solidifying India’s presence in international markets.
• Strategic Role: Waaree’s dominance reflects the potential of Indian manufacturers to compete with global giants, especially in securing the domestic market from dumping practices.

India’s leading solar manufacturers are setting the stage for the country to emerge as a global hub for renewable energy production, contributing significantly to economic growth and sustainability goals.

Key Factors Driving Their Success:

1. Government Support:
   Policies such as the PLI (Production Linked Incentive) Scheme and the National Solar Mission provide financial and regulatory incentives, encouraging domestic production and reducing import dependency.
2. Focus on Innovation:
   Indian companies are increasingly investing in R&D to enhance the efficiency, durability, and cost-effectiveness of their solar products.
3. Expanding Export Opportunities:
   With competitive pricing and high-quality products, Indian manufacturers are steadily increasing their footprint in international markets, competing against global players like China.
4. Sustainability Goals:
   India’s push toward renewable energy, supported by corporate ESG commitments, ensures sustained demand and growth for solar manufacturers.

Conclusion

As India aims to be a global solar manufacturing hub, these companies play a pivotal role in achieving the dual objectives of meeting domestic demand and exporting high-quality, cost-effective solar products. By leveraging government initiatives, scaling operations, and integrating advanced technologies, Indian solar manufacturers are well on their way to establishing themselves as leaders in the global renewable energy revolution.

.    .    .