• Sat. Dec 2nd, 2023

India Strives to Become Global Solar Module Production Leader by 2025, Reveals ET EnergyWorld


Nov 20, 2023

India is set to become the second-largest producer of solar modules by 2025, surpassing Southeast Asia and catering mainly to the US demand for solar modules, according to a Wood Mackenzie report. This will be achieved despite high production costs caused by a 25% basic customs duty on imported solar cells.

The report also highlights that China is predicted to hold over 80% of the global capacity for the solar module supply chain from 2024. However, Indian manufacturers may face challenges in boosting their exports due to competition from Chinese modules, which currently have a lower cost due to a 40% tax on imported Chinese modules. There is speculation that the Indian government might lower the duty on Chinese modules to support export ambitions.

The US is developing its own photovoltaic manufacturing capabilities under the Inflation Reduction Act but remains dependent on imports due to the absence of domestic production of wafers, cells, or glass. This dependency is expected to continue once President Biden’s temporary waiver on solar import tariffs expires in mid-2024.

China has a lead in N-type cell technology, accounting for 95% of the announced global expansions in this area. The report suggests that vertically integrated manufacturers may still find opportunities for growth despite tightened profit margins in the sector.

The study also discusses Southeast Asia’s solar capacity, which is mainly driven by Chinese investments, and Europe’s demand for protective tariffs on Chinese modules due to non-competitive prices. These shifts underscore the changing dynamics of the global solar module supply chain.

In summary, India’s position as a second-largest producer of solar modules by 2025 reflects its growing importance in meeting global demand for these products, particularly from the US market. However, challenges remain in terms of competition from other countries and high production costs that need to be addressed by policymakers and manufacturers alike.

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