India could face a shortage of solar cells as early as June because of stricter local sourcing requirements introduced by the government.
The country has around 25.6 gigawatt of solar cells production capacity against demand of about 50 GW, with imports from China accounting for more than 90% of India’s solar cell demand, the North India Module Manufacturer Association said in a letter.
Local sourcing policy reshapes the market
Around 55% of solar cells, a key component in making modules that turn sunlight into electricity, are produced in India using older technology and are rarely used in new projects, creating a mismatch between supply and project needs.
India, which counts on solar power generation to meet its 2070 net-zero goal, has already imposed the use of locally made modules. However, most of these modules are built with Chinese cells.
Mandatory use of local cells from June would raise prices and delay projects across the pipeline, the association said, asking the government to consider a phased rollout after nine months from June, given that nearly 50 GW of solar cell capacity under construction is expected to become operational within a year.
Industry concerns over project timelines
“Immediate enforcement of mandates under these constraints may lead to severe supply shortages of compliant cells, escalation in module costs, disruptions and delays in project execution and adverse impact on India’s renewable energy targets,” said the association.
Manufacturers, including private firms Solex Energy and Rayzon Solar have also warned that the new mandate could disrupt existing 170-GW module manufacturing capacity, needing domestic cell supplies.The clean energy ministry has not responded to Reuters’ email seeking comments.
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