Bridging The Solar Gap: Industry Experts Push for Cell-Module Capacity Alignment

India’s solar manufacturing sector is expanding rapidly, but a growing concern remains, the widening gap between solar cell production and module assembly. While module capacity has surged past 90 GW, cell manufacturing still lags at around 25 GW, forcing continued reliance on imports. This imbalance poses a challenge to India’s self-reliance goals, despite strong policy support and rising private investment.

This concern was addressed at the Reconnect Summit 25, organised by Energetica India in New Delhi, during a panel discussion titled, 'Aligning Capacity--Bridging the Gap Between Cell Manufacturing and Module Production.'

The session, moderated by Sehul Bhatt, Director at Crisil Intelligence, featured a panel of key industry players including Kshiteej Mishra,Practice Member (Mobility, Energy and Transportation), Praxis Global Alliance, Abhishek Kumar, Executive Director at Avener Capital, Hardip Singh, COO of GREW Solar, Er. Shailendra Shukla, Chairman of Icon Solar-En Power Technologies, and Ankit Malhotra, COO of Insolation Energy Ltd.

The session began with Er. Shailendra Shukla highlighting the mismatch between India’s solar module and solar cell capacities. He noted that while installed module manufacturing capacity has crossed 85 GW unofficially, the official approved list of cell manufacturers includes only six companies with around 13–14 GW capacity. Even though reports suggest India has around 20–22 GW of installed cell capacity, there's a wide gap. With more projects under development, the target is to reach 45–50 GW by December 2026. However, this still leaves a 100 percent gap compared to modules.

Shukla emphasised that policy delays like the ALMM and ALCM schemes, initially announced in 2020 but deferred until 2024, impact investor confidence. If similar deferrals happen again, the gap between cell and module production will persist. Yet, with industry giants like Adani and Reliance entering cell manufacturing, capacities could potentially align by March 2026.

Kumar noted that actual operational capacity is around 27–28 GW. He pointed out that some large manufacturers are not yet ALMM-listed, affecting visibility. The module side only surged after ALMM’s serious implementation in April 2024, growing from 30–35 GW to 60-70 GW in just over a year.

He noted that PLI announcements triggered a wave of cell manufacturing investments, but many investors hesitated due to policy uncertainties. The industry relies heavily on government signals, and tariff barriers don’t deter competitors, but non-tariff barriers like ALMM and ALCM do. If these had been announced together earlier, cell production might have kept pace.

Kumar added that MNRE received commitment letters from both PLI and non-PLI manufacturers, totalling close to 100 GW in cell capacity. However, he stressed the need for speed, projecting 40–50 GW by March 2026 and possibly 80–90 GW within a year, overshooting domestic demand. The next big push must come in wafer production, where progress is limited.

Malhotra then shifted focus to policy-driven manufacturing. He emphasised that uncertainty in policy for upstream components like glass and EVA sheets hampers the decision-making process.He mentioned that India cannot yet compete with Chinese module prices in international markets. Many domestic manufacturers lack backward integration, and there's no clarity on support for full value chain development. With experience across Bangladesh, Sri Lanka, and South Africa, he highlighted that India still lags in competing with global pricing.

The panel also touched on government incentives such as upcoming capital subsidies for upstream technologies, ALMM/BCDs creating market security, and potential new support mechanisms. These are seen as crucial for long-term investor confidence.

Mishra expressed concern over China’s dominance in wafer and polysilicon technologies, cost advantages, and lack of Indian capacity. He pointed out that in C&I segments, developers often prioritise project economics over national manufacturing, still opting for Chinese modules.

On the other hand, Er. Shukla acknowledged early inefficiencies but believed technology and manufacturing would mature by 2030, allowing for complete domestic sufficiency.

Kumar pointed out that most module and cell capacity expansion has come from non-PLI players, with many investing far beyond the incentivised amount. For example, companies awarded 2 GW of PLI are setting up 10 GW facilities, based on strong market expectations.

He also cited a revised government target of 1800 GW renewable capacity by 2047, signaling longer-term planning beyond 2030. He welcomed demand-side schemes like PM-KUSUM for their role in consumption generation.

Malhotra discussed on-ground implementation challenges. He emphasised that high-tech sectors like battery or semiconductors differ from traditional Indian industries like textiles or pharma. For solar, he said there's insufficient recycling focus, especially on silicon recovery from used panels. He argued that schemes like PM Surya Ghar Yojana serve as a form of PLI for end-users. These demand-side subsidies have unlocked the residential market, which was previously neglected due to lack of grid connectivity.

Further, commenting on export-oriented investments and China+1, one of the panelists confirmed that demand is expected to average 50 GW/year domestically, with forecasts pointing to 125 GW by 2030. This growth, combined with state incentives and a favorable FDI policy, makes India attractive to foreign investors. Key support pillars include PLI, capital subsidies, BCD, ALMM, and green corridors in states like Gujarat, Rajasthan, and Andhra Pradesh.

While speaking about capex comparisons, Er. Shukla noted that setting up upstream facilities like ingots or wafers costs 3–4 times more than modules. Hence, government support is essential. He suggested that PSUs like NTPC, which have surplus funds, should lead the way in building these expensive upstream plants. NTPC’s growing solar portfolio has already brought tariffs down to INR 2.15–2.20/kWh.

When asked about evolving module technologies, Kumar said companies are designing robust lines anticipating future shifts. He pointed out that green hydrogen demand alone could drive hundreds of gigawatts of solar installations.

Panelists noted that India’s R&D spending is just one-third that of its global peers. Despite the availability of substantial government R&D funds, much of it remains underutilised. As a result, the solar industry has failed to fully capitalise on innovation, leading to a significant patent gap. "China holds over 38,000 solar-related patents, while India has fewer than 900," said Kumar.

The panel concluded by stressing the need for targeted financing mechanisms, such as classifying solar under priority sector lending, to better support the industry. They also pointed out that inadequate R&D directly impacts workforce skill development. The discussion underscored strong domestic demand, uncertain export potential due to global tariffs, the importance of consistent policy, and the continuing risks posed by developments in China and global price volatility.