Energy Security in a Volatile World: Is Renewables the Real Answer?
The latest West Asia conflict has exposed the risks of heavy dependence on imported fossil fuels. Renewable energy, battery storage and EVs are increasingly being seen as a means for energy security. India must strengthen domestic manufacturing, secure critical raw materials, and deepen technology partnerships to reduce renewable supply chain risks.
June 09, 2026. By Mrinmoy Dey
The recurring conflict in West Asia is once again exposing the deep energy security vulnerabilities of major oil-importing economies such as India and several Asian nations, where rising crude prices, supply uncertainties and shipping disruptions threaten to trigger inflationary pressures and economic slowdowns reminiscent of the austerity measures witnessed during the Covid-era disruptions.
With the Strait of Hormuz remaining a critical chokepoint for global oil trade, even the possibility of prolonged instability sends shockwaves across Asian energy markets heavily dependent on imported fossil fuels. India, now the world’s third-largest oil consumer, remains particularly exposed as its energy demand continues to rise alongside rapid economic growth. In 2025, India’s crude oil demand expanded by around 3.2 percent, significantly outpacing China, even as China moved faster in scaling electric mobility and alternative energy adoption.
The current geopolitical volatility is therefore accelerating policy attention toward renewable energy, battery storage, green hydrogen and electric mobility as strategic diversification tools aimed not only at decarbonisation but also at insulating economies from recurring fossil fuel shocks and external supply disruptions.
Can Renewable Energy Reduce Fossil Fuel Dependence Meaningfully?
The ongoing surge in oil and gas prices triggered by geopolitical tensions, including the US-Israel war with Iran, is accelerating global demand for clean energy technologies such as solar, battery storage and electric vehicles, which are increasingly being viewed as essential tools for strengthening energy security, improving grid resilience and reducing long-term dependence on fossil fuels.
Global energy think tank Ember highlighted that clean energy technologies are beginning to achieve sufficient scale to mitigate the economic and energy supply impacts of global fossil fuel disruptions. Ember’s Global Electricity Review 2026 found that record additions in solar generation during 2025 displaced gas-fired electricity generation equivalent to the entire volume of liquefied natural gas exports transported through the Strait of Hormuz during the year.
The report also stated that the global electric vehicle fleet displaced approximately 1.8 million barrels per day of oil demand in 2025, representing nearly 13 percent of total US crude oil production, underlining the growing role of electrification and renewable energy in reshaping global energy markets.
India stands third globally in renewable energy installed capacity. So far, a total of 283.46 GW of capacity from non-fossil fuel sources has been installed in the country as on March 31, 2026. This includes 274.68 GW Renewable Energy (150.26 GW Solar Power, 56.09 GW Wind Power, 11.75 GW Bio Energy, 5.17 GW Small Hydro Power, 51.41 GW Large Hydro Power) and 8.78 GW Nuclear Power capacity, according to the Ministry of New and Renewable Energy (MNRE) data.
And, China stands to gain the most from this shift, given its dominance in the solar and battery energy storage systems supply chain.
China Hits New Highs in Solar Exports
According to data released by the Chinese customs authority and analysed by Ember through its China Cleantech Exports Data Explorer, China recorded unprecedented exports of solar products, batteries and EVs in March 2026. Overall cleantech exports rose 70 percent compared to March 2025 and increased 38 percent over February 2026 levels as countries ramped up procurement amid volatile fossil fuel markets.
China’s solar exports surged to a record 68 GW in March 2026. Chinese solar exports hit record highs across several regions, with 50 countries registering their highest-ever monthly imports and another 60 posting six-month peaks. Africa emerged as one of the fastest-growing markets, with imports soaring 176 percent month-on-month to 10 GW, while shipments to Asia doubled to 39 GW, setting new records for both regions. Together, Asia and Africa accounted for nearly 75 percent of the overall rise in Chinese solar exports.
India led the growth in Asia with imports rising 141 percent over February 2026 levels, followed by Malaysia and Lao PDR, which posted sharp gains driven by accelerated renewable energy deployment. In Africa, Nigeria, Kenya and Ethiopia each crossed the 1 GW import mark for the first time in a single month, largely through procurement of solar cells.
Besides the fossil fuel turbulence, China’s abolishment of the 9 percent export tax rebates on solar photovoltaic products from April 2026 also contributed to this sharp spike in exports.
Battery exports from China, too, witnessed strong growth as nations expanded investments in energy storage infrastructure to support rising solar deployment and shift daytime renewable electricity into evening peak demand periods. China’s battery exports climbed 44 percent month-on-month to reach USD 10 billion in March 2026, with especially strong demand coming from the European Union, Australia and India, all of which have large-scale battery energy storage pipelines under development.
Solar PV Supply Chain: The Chinese Hegemony
According to International Energy Agency (IEA) estimates, China accounts for over 80 percent of global manufacturing across all stages of solar panel production, including polysilicon, ingots, wafers, cells, and modules, which is more than twice its share of global photovoltaic demand.
China’s dominance in the clean energy sector has been built on deeply integrated supply chains, massive manufacturing scale and access to low-cost renewable power, allowing it to produce solar equipment at prices few global competitors can match.
However, this level of concentration poses strategic risks for the global supply chain. Building renewable capacity to reduce fossil fuel dependence while the renewable energy supply chain itself is highly concentrated on one source would mean: Shifting the majority of eggs from one basket to another one without really diversifying.
To address this, countries worldwide are looking at alternative sources. For example, the US and EU are pushing policies such as the Inflation Reduction Act and Green Deal to strengthen domestic clean energy manufacturing and reduce reliance on Chinese solar imports.
“For countries such as India, this dynamic presents both a challenge and an opportunity. The confluence of China’s dominance, coupled with intensifying competition and geopolitical risks, underscores the need for India to localise its solar manufacturing capabilities. By capitalising on its growing manufacturing capabilities, abundant human resources and policy initiatives such as the Production-Linked Incentive (PLI) scheme, India has the potential to emerge as a cost-competitive and reliable alternative in the global market,” noted a TERI report.
Emergence of India as a Solar Manufacturing Hub
Though way behind in terms of total production capacity, India is emerging as a worthy contender with solar module capacity enlisted in the Ministry of New and Renewable Energy’s Approved List Models and Manufacturers (ALMM) reaching about 194 GW in May 2026. The capacity of solar cells under ALMM List-II has reached about 30.5 GW.
The country has ambitious plans in backward integration through the manufacturing of upstream components like solar cells, wafers, ingots and polysilicon. But can it meaningfully challenge the Chinese dominance and emerge as a global solar manufacturing hub?
According to TERI, for India to realise its potential in PV manufacturing would require addressing structural supply chain gaps, investing in advanced manufacturing technologies, and ensuring consistent policy and financial support to build a robust and self-sufficient solar ecosystem capable of meeting domestic and international needs.
The government is offering both supply and demand side stimuli to attain self-reliance in solar PV manufacturing. In addition to the PLI Scheme, the government also offer 20-25 percent subsidy for capital expenditure investment under M-SIPS for electronics manufacturing, which inter alia also constitutes solar PV manufacturing.
Additionally, the government has mandated domestic content requirement (DCR) clauses mandating the use of India-made solar modules in government projects and projects under various government schemes like PM Surya Ghar Yojana and PM-KUSUM Yojana through ALMM. Further, MNRE ruled out a blanket extension of the deadline, i.e. June 1, 2026, for the implementation of ALMM List – II for solar cells for net metering and open access projects.
In March 2026, MNRE expanded its ALMM framework to include ingots and wafers under a new List-III, mandating their use from June 1, 2028. The first list will be published when at least three independent wafer manufacturers with a combined 15 GW capacity are enlisted, and the cut-off date will be 7 days post the initial list issuance.
From the demand side push, the government has set a target of 500 GW of non-fossil fuel energy by 2030, which will include about 292 GW of solar. In RE-INVEST 2024, held in September 2024, renewable energy developers pledged about 480 GW of capacity addition, with solar being the largest source.
These incentives and policy measures are expected to propel the Indian PV manufacturing industry. As per TERI estimates, India’s module manufacturing capacity is projected to surpass 280 GW/year, with solar cell fabrication capacity rising from ~30 GW currently to about 171 GW/year by 2030.
Polysilicon, or solar-grade silicon, remains the critical missing link in India’s solar manufacturing chain, although several projects are currently in the pipeline, including new polysilicon plants expected by 2027–2028. Analysts project that India could develop up to 100 GW of polysilicon capacity, amounting to tens of thousands of tonnes annually, by 2030.
While India has established the foundations of a large domestic module manufacturing industry, the long-term competitiveness and resilience of this expansion will depend on how rapidly domestic cell manufacturing, upstream silicon production and the ancillary ecosystem scale in parallel, noted TERI.
“From a system-cost perspective, the quickest lever to reduce import exposure without raising tariffs remains the module and cell segment, because it represents the largest single equipment line-item in a utility-scale solar plant and therefore dominates near-term value-add, jobs, and bankability. At benchmark utility-scale capital costs typically cited in the INR 3.5–4.5 crore/MW range, policy calibration must balance manufacturing scale-up with delivered electricity affordability for industry and consumers,” noted the TERI report.
The Path Forward
India stands poised to evolve from gigawatt buyer to gigawatt maker throughout the value chain by 2030, if upstream integration, equipment self-reliance, ESG embedding, and skilled ecosystems take root. The proposed policies and financing tools would slash wafer and polysilicon imports, spawn jobs, and elevate Made-in-India modules as trusted players in US and EU-driven markets.
In the end, India’s push to become self-reliant in solar manufacturing has to be seen realistically. China still dominates the global solar supply chain, from polysilicon and wafers to cells and modules, and completely cutting off dependence is neither practical nor economically sensible. Temporary disruptions due to geopolitical tensions can happen, but a complete long-term break from Chinese supply chains is unlikely.
In fact, China also depends heavily on export markets like India, especially as tariff barriers rise in the US, UK and Europe, and its own manufacturing capacity far exceeds domestic demand. Still, India must ensure this dependence does not turn into a strategic weakness in the future.
The solution for India is not isolation, but balance. The country needs to steadily build its own manufacturing strength, secure raw material supply chains, encourage technology partnerships and reduce vulnerabilities over time. A practical middle path, i.e. strengthening domestic capability while staying connected to global supply chains, will likely be the most sustainable way forward.
With the Strait of Hormuz remaining a critical chokepoint for global oil trade, even the possibility of prolonged instability sends shockwaves across Asian energy markets heavily dependent on imported fossil fuels. India, now the world’s third-largest oil consumer, remains particularly exposed as its energy demand continues to rise alongside rapid economic growth. In 2025, India’s crude oil demand expanded by around 3.2 percent, significantly outpacing China, even as China moved faster in scaling electric mobility and alternative energy adoption.
The current geopolitical volatility is therefore accelerating policy attention toward renewable energy, battery storage, green hydrogen and electric mobility as strategic diversification tools aimed not only at decarbonisation but also at insulating economies from recurring fossil fuel shocks and external supply disruptions.
Can Renewable Energy Reduce Fossil Fuel Dependence Meaningfully?
The ongoing surge in oil and gas prices triggered by geopolitical tensions, including the US-Israel war with Iran, is accelerating global demand for clean energy technologies such as solar, battery storage and electric vehicles, which are increasingly being viewed as essential tools for strengthening energy security, improving grid resilience and reducing long-term dependence on fossil fuels.
Global energy think tank Ember highlighted that clean energy technologies are beginning to achieve sufficient scale to mitigate the economic and energy supply impacts of global fossil fuel disruptions. Ember’s Global Electricity Review 2026 found that record additions in solar generation during 2025 displaced gas-fired electricity generation equivalent to the entire volume of liquefied natural gas exports transported through the Strait of Hormuz during the year.
The report also stated that the global electric vehicle fleet displaced approximately 1.8 million barrels per day of oil demand in 2025, representing nearly 13 percent of total US crude oil production, underlining the growing role of electrification and renewable energy in reshaping global energy markets.
India stands third globally in renewable energy installed capacity. So far, a total of 283.46 GW of capacity from non-fossil fuel sources has been installed in the country as on March 31, 2026. This includes 274.68 GW Renewable Energy (150.26 GW Solar Power, 56.09 GW Wind Power, 11.75 GW Bio Energy, 5.17 GW Small Hydro Power, 51.41 GW Large Hydro Power) and 8.78 GW Nuclear Power capacity, according to the Ministry of New and Renewable Energy (MNRE) data.
And, China stands to gain the most from this shift, given its dominance in the solar and battery energy storage systems supply chain.
China Hits New Highs in Solar Exports
According to data released by the Chinese customs authority and analysed by Ember through its China Cleantech Exports Data Explorer, China recorded unprecedented exports of solar products, batteries and EVs in March 2026. Overall cleantech exports rose 70 percent compared to March 2025 and increased 38 percent over February 2026 levels as countries ramped up procurement amid volatile fossil fuel markets.
China’s solar exports surged to a record 68 GW in March 2026. Chinese solar exports hit record highs across several regions, with 50 countries registering their highest-ever monthly imports and another 60 posting six-month peaks. Africa emerged as one of the fastest-growing markets, with imports soaring 176 percent month-on-month to 10 GW, while shipments to Asia doubled to 39 GW, setting new records for both regions. Together, Asia and Africa accounted for nearly 75 percent of the overall rise in Chinese solar exports.
India led the growth in Asia with imports rising 141 percent over February 2026 levels, followed by Malaysia and Lao PDR, which posted sharp gains driven by accelerated renewable energy deployment. In Africa, Nigeria, Kenya and Ethiopia each crossed the 1 GW import mark for the first time in a single month, largely through procurement of solar cells.
Besides the fossil fuel turbulence, China’s abolishment of the 9 percent export tax rebates on solar photovoltaic products from April 2026 also contributed to this sharp spike in exports.
Battery exports from China, too, witnessed strong growth as nations expanded investments in energy storage infrastructure to support rising solar deployment and shift daytime renewable electricity into evening peak demand periods. China’s battery exports climbed 44 percent month-on-month to reach USD 10 billion in March 2026, with especially strong demand coming from the European Union, Australia and India, all of which have large-scale battery energy storage pipelines under development.
Solar PV Supply Chain: The Chinese Hegemony
According to International Energy Agency (IEA) estimates, China accounts for over 80 percent of global manufacturing across all stages of solar panel production, including polysilicon, ingots, wafers, cells, and modules, which is more than twice its share of global photovoltaic demand.
China’s dominance in the clean energy sector has been built on deeply integrated supply chains, massive manufacturing scale and access to low-cost renewable power, allowing it to produce solar equipment at prices few global competitors can match.
However, this level of concentration poses strategic risks for the global supply chain. Building renewable capacity to reduce fossil fuel dependence while the renewable energy supply chain itself is highly concentrated on one source would mean: Shifting the majority of eggs from one basket to another one without really diversifying.
To address this, countries worldwide are looking at alternative sources. For example, the US and EU are pushing policies such as the Inflation Reduction Act and Green Deal to strengthen domestic clean energy manufacturing and reduce reliance on Chinese solar imports.
“For countries such as India, this dynamic presents both a challenge and an opportunity. The confluence of China’s dominance, coupled with intensifying competition and geopolitical risks, underscores the need for India to localise its solar manufacturing capabilities. By capitalising on its growing manufacturing capabilities, abundant human resources and policy initiatives such as the Production-Linked Incentive (PLI) scheme, India has the potential to emerge as a cost-competitive and reliable alternative in the global market,” noted a TERI report.
Emergence of India as a Solar Manufacturing Hub
Though way behind in terms of total production capacity, India is emerging as a worthy contender with solar module capacity enlisted in the Ministry of New and Renewable Energy’s Approved List Models and Manufacturers (ALMM) reaching about 194 GW in May 2026. The capacity of solar cells under ALMM List-II has reached about 30.5 GW.
The country has ambitious plans in backward integration through the manufacturing of upstream components like solar cells, wafers, ingots and polysilicon. But can it meaningfully challenge the Chinese dominance and emerge as a global solar manufacturing hub?
According to TERI, for India to realise its potential in PV manufacturing would require addressing structural supply chain gaps, investing in advanced manufacturing technologies, and ensuring consistent policy and financial support to build a robust and self-sufficient solar ecosystem capable of meeting domestic and international needs.
The government is offering both supply and demand side stimuli to attain self-reliance in solar PV manufacturing. In addition to the PLI Scheme, the government also offer 20-25 percent subsidy for capital expenditure investment under M-SIPS for electronics manufacturing, which inter alia also constitutes solar PV manufacturing.
Additionally, the government has mandated domestic content requirement (DCR) clauses mandating the use of India-made solar modules in government projects and projects under various government schemes like PM Surya Ghar Yojana and PM-KUSUM Yojana through ALMM. Further, MNRE ruled out a blanket extension of the deadline, i.e. June 1, 2026, for the implementation of ALMM List – II for solar cells for net metering and open access projects.
In March 2026, MNRE expanded its ALMM framework to include ingots and wafers under a new List-III, mandating their use from June 1, 2028. The first list will be published when at least three independent wafer manufacturers with a combined 15 GW capacity are enlisted, and the cut-off date will be 7 days post the initial list issuance.
From the demand side push, the government has set a target of 500 GW of non-fossil fuel energy by 2030, which will include about 292 GW of solar. In RE-INVEST 2024, held in September 2024, renewable energy developers pledged about 480 GW of capacity addition, with solar being the largest source.
These incentives and policy measures are expected to propel the Indian PV manufacturing industry. As per TERI estimates, India’s module manufacturing capacity is projected to surpass 280 GW/year, with solar cell fabrication capacity rising from ~30 GW currently to about 171 GW/year by 2030.
Polysilicon, or solar-grade silicon, remains the critical missing link in India’s solar manufacturing chain, although several projects are currently in the pipeline, including new polysilicon plants expected by 2027–2028. Analysts project that India could develop up to 100 GW of polysilicon capacity, amounting to tens of thousands of tonnes annually, by 2030.
While India has established the foundations of a large domestic module manufacturing industry, the long-term competitiveness and resilience of this expansion will depend on how rapidly domestic cell manufacturing, upstream silicon production and the ancillary ecosystem scale in parallel, noted TERI.
“From a system-cost perspective, the quickest lever to reduce import exposure without raising tariffs remains the module and cell segment, because it represents the largest single equipment line-item in a utility-scale solar plant and therefore dominates near-term value-add, jobs, and bankability. At benchmark utility-scale capital costs typically cited in the INR 3.5–4.5 crore/MW range, policy calibration must balance manufacturing scale-up with delivered electricity affordability for industry and consumers,” noted the TERI report.
The Path Forward
India stands poised to evolve from gigawatt buyer to gigawatt maker throughout the value chain by 2030, if upstream integration, equipment self-reliance, ESG embedding, and skilled ecosystems take root. The proposed policies and financing tools would slash wafer and polysilicon imports, spawn jobs, and elevate Made-in-India modules as trusted players in US and EU-driven markets.
In the end, India’s push to become self-reliant in solar manufacturing has to be seen realistically. China still dominates the global solar supply chain, from polysilicon and wafers to cells and modules, and completely cutting off dependence is neither practical nor economically sensible. Temporary disruptions due to geopolitical tensions can happen, but a complete long-term break from Chinese supply chains is unlikely.
In fact, China also depends heavily on export markets like India, especially as tariff barriers rise in the US, UK and Europe, and its own manufacturing capacity far exceeds domestic demand. Still, India must ensure this dependence does not turn into a strategic weakness in the future.
The solution for India is not isolation, but balance. The country needs to steadily build its own manufacturing strength, secure raw material supply chains, encourage technology partnerships and reduce vulnerabilities over time. A practical middle path, i.e. strengthening domestic capability while staying connected to global supply chains, will likely be the most sustainable way forward.
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