As the world grapples with the pressing need to combat climate change, the demand for renewable energy sources has taken centre stage. The Paris Climate Agreement and G20 summits have galvanized nations to set ambitious decarbonization goals, propelling the demand for solar energy. Amidst this global push, countries are competing to lead in solar module manufacturing, a key focus for achieving green energy targets.
China currently dominates the global solar module manufacturing landscape with unparalleled capacity. Its supremacy is sustained by abundant raw materials, a robust supply chain, advanced technology, economies of scale, labour availability, and extensive government support.
According to Wood Mackenzie data, China’s module manufacturing capacity tripled during 2022, from 198 GW to about 562 GW, and rose by a further 84% to over 1 TW by the end of 2023. The same report predicts that China will have enough capacity to meet global demand through 2032.
Vietnam holds the second position due to its growing manufacturing capacity and supportive government policies. Its strategic location and cost advantages have made it an attractive region for solar module production. In 2023, Vietnam’s nameplate capacity accounted for 70 GW.
India’s strides in solar module manufacturing
India is making significant progress in solar module manufacturing. The country has launched various initiatives, such as the Production-Linked Incentive (PLI) scheme and the Approved List of Models and Manufacturers (ALMM), to boost its domestic manufacturing capacity and enhance its competitive edge in the global market.
Despite its progress, India still lags behind leaders like China and Vietnam. However, recent advancements and strategic initiatives, including a Memorandum of Understanding (MoU) with the UAE and an expanding export strategy, are positioning India to become the second-largest manufacturing region.
A report by Wood Mackenzie in November 2023 highlighted that India is poised to become the world’s second-largest solar module manufacturing region by 2025. This projection is underpinned by India’s strategic initiatives and favourable policies aimed at expanding its manufacturing capabilities. India currently ranks third globally, with a capacity of 64.5 GW and a 3% share of the global market.
This is because India’s government has implemented supportive policies and initiatives under the Panchamrit action plan, aiming for 500 GW of non-fossil fuel energy by 2030. Prime Minister Narendra Modi’s Pradhan Mantri Suryodaya Yojana (PMSY) targets rooftop solar panels in one crore households. Government support includes the ALMM list, the PLI scheme, and an import tax of 40% on solar panels. Additionally, India’s competitive labor and operational costs make it a prime location for solar module manufacturing. Industry stakeholders support talent development through training programs, internships, and partnerships with educational institutions.
India’s path to becoming a leader
India aims to reach 110 GW of solar module manufacturing capacity by 2025-26, positioning it ahead of Vietnam but still trailing behind China. To close the gap with China and overtake Vietnam, India must focus on:
- Research and development: Indian firms should invest more in R&D to drive innovation in solar technologies.
- Increasing production capacity: India needs to scale up existing plants and build new ones to meet rising demand.
- Improving manufacturing efficiency: India must adopt advanced manufacturing techniques, automate production, optimize logistics, and reduce reliance on imported materials.
- Export strategy: India is expanding its export strategy, with the US emerging as its top buyer in 2023. The ALMM will enhance quality assurance, paving the way for global expansion.
- Infrastructure development: India needs to strengthen infrastructure by improving transportation, ensuring reliable power supply, and enhancing logistics.
Conclusion
To lead the global solar module manufacturing industry, India needs comprehensive policy and regulatory frameworks that foster innovation, attract investments, and enhance manufacturing capabilities. Continued government support, coupled with strategic investments in technology and infrastructure, will be crucial in realizing India’s renewable energy goals and cementing its position as a global leader in solar module manufacturing. With the right focus and sustained efforts, India is well on its way to riding the solar wave to the top echelons of the global renewable energy landscape.
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