India’s solar sector faces a supply-demand mismatch as localisation policies collide with heavy dependence on imported cells.
India may face a significant shortage of solar cells as new localisation rules set to take effect in June require renewable energy projects to use domestically manufactured cells, raising concerns across the solar industry.
In a letter dated April 7 to the renewable energy ministry, the North India Module Manufacturer Association cautioned that existing domestic production capacity is insufficient to meet demand. India currently has around 25.6 gigawatts (GW) of solar cell manufacturing capacity, compared with annual demand of nearly 50 GW. More than 90% of the country’s solar cell requirements are presently met through imports, largely from China.
The industry body also highlighted a technology gap, noting that nearly 55% of locally produced solar cells are based on older manufacturing technologies that are rarely used in new solar installations. This mismatch could make it difficult for developers to source compliant components once the mandate comes into force.
India has already implemented rules requiring locally manufactured solar modules, though many of these modules still rely on imported cells. Extending localisation requirements to cells, industry participants say, could increase module prices and delay project execution across the renewable energy pipeline.
The association has urged the government to consider a phased rollout, suggesting a delay of about nine months. Nearly 50 GW of new domestic solar cell capacity is currently under construction and expected to become operational within a year, which could help ease supply constraints.
Manufacturers including Solex Energy and Rayzon Solar have echoed similar concerns, warning that immediate implementation could disrupt India’s 170-GW solar module manufacturing capacity.
