Indian Solar PV Module Manufacturing Capacity to Cross 60 GW by 2025, says ICRA
ICRA expects the solar photovoltaic (PV) module manufacturing capacity in India to increase to over 60 GW by 2025 from the current level of ~37 GW, with improved backward integration into cell and wafer manufacturing.
November 06, 2023. By News Bureau
This is likely to further enhance to nearly 100 GW as the capacity awarded under the production-linked incentive (PLI) scheme comes on stream, led by the strong policy support and growing demand from domestic solar power installations. The policy measures include the notification of Approved List of Models & Manufacturers (ALMM) comprising only domestic manufacturers, imposition of basic customs duty on imported cells & modules, and the PLI scheme.
Further, the solar power generation capacity is expected to witness significant growth over the coming decade on the back of India’s climate transition goals, in turn driving the demand for solar PV modules.
Commenting on the solar OEMs, Vikram V, Vice President & Sector Head - Corporate Ratings, ICRA, said: “While the abeyance of the ALMM order till March 2024 and sharp decline in global module prices is leading to an increase in PV module imports in FY2024, the expected scale-up in domestic manufacturing capacity with backward integration over the next two to three years, along with resumption of the ALMM order, is expected to reduce import dependence. Apart from module capacity, the OEMs are expected to enhance the wafer and cell manufacturing capacities with cell capacity expected to cross 25 GW by 2025 from the current level of ~6 GW. However, the country will remain dependent on polysilicon imports as these capacities are likely to take longer to set up, involving a larger capital investment.”
The solar PV module supply chain is dominated by China, with over 80% share in manufacturing capacity across polysilicon, wafer, cell, and modules. In comparison, the manufacturing capacity in India is relatively low and is largely restricted to the last manufacturing stage. The PLI scheme is expected to change this, with integrated module units expected to come up in India over the medium term.
The Government of India (GoI) has awarded incentives for setting up module manufacturing capacity of 48 GW, including fully integrated facilities of 24 GW, i.e., from polysilicon to module. The capex outlay for setting up these integrated module capacities is estimated to exceed Rs. 1.0 lakh crore. Given the significant scale-up expected in manufacturing capacity, garnering a share of the global demand through exports would remain critical for domestic solar OEMs.
All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided 'as is' without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information.
Also, ICRA or any of its group companies, while publishing or otherwise disseminating other reports may have presented data, analyses and/or opinions that may be inconsistent with the data, analyses and/or opinions presented in this publication. All information contained herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents.
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