Indian solar equipment makers plan ₹30,000 crore play for 50 GW of cell capacity to meet local sourcing mandate

India currently has a manufacturing capacity of 160 GW for solar modules but only about 30 GW for solar cells (at the start of 2026), necessitating imports to cater to domestic demand.

The development follows a new government rule, taking effect this June, which mandates that solar cells for government-supported schemes and projects from where distribution companies procure electricity must come only from an approved list of models and manufacturers (ALMM). This policy is designed to slash reliance on Chinese imports and ensure only verified local technology is used in India’s power grid.

With India aiming to add 50 GW of renewable-energy capacity each year and reach 500 GW by 2030, the new playbook is part of the Indian government’s decision to reduce reliance on Chinese supplies and develop an indigenous solar supply chain. There have also been instances of the US government investing solar module consignments from India over their use of Chinese cells.

India’s cell manufacturing capacity, currently at 30 GW, is expected to touch 45 GW by the end of FY26. “By the end of the next fiscal year, with the pipeline companies have, the cumulative capacity may reach 95 GW,” said a person aware of the developments, who did not wish to be named. The capital expenditure required for 1 GW of solar cell manufacturing capacity is about ₹600 crore.

Polysilicon, from which ingots are cast, is the building block for solar cell manufacturing. Wafers cut from these ingots are then used to make solar cells, after which modules are assembled. China dominates the manufacturing of polysilicon, ingot, wafers and cells.

Major players in the space include Waaree Energies, which will have an estimated capacity of 15.4 GW by FY27, Adani Solar (estimated 10 GW), Premier Industries (10.6 GW), ReNew (6.4 GW) and Avaada (6 GW).

Queries emailed to Waaree, Adani Solar, RIL, Premier Industries, ReNew and Avaada remained unanswered at the time of publishing.

Companies’ expansion targets

Vinay Rustagi, chief business officer of Premier Energies, said, “The industry is totally prepared to meet the upcoming ALMM implementation starting in June, with total cell manufacturing capacity expected at about 50 GW.” He noted, however, that several renewable energy projects auctioned before December 2024 were exempted from the ALMM rule to ensure smooth implementation. Rustagi said Premier Energies’ cell manufacturing capacity is set to grow from 3.6 GW at present to 10.6 GW in the next 6-7 months.

Prashant Mathur, CEO of Saatvik Green Energy Ltd, said, “By mid-FY27 we expect to commission about 2.4 GW of solar cell capacity at our new Odisha facility as part of the first phase of our integrated expansion. This will complement our module lines and firmly place us among India’s emerging, fully integrated solar manufacturers. With ALMM for cells coming into effect from June, the industry will clearly differentiate between assemblers and true manufacturers.”

He added, “Over the next few years, we plan to scale cell capacity further, deepen backward integration, and strengthen our position as a reliable, ALMM‑compliant and globally competitive partner for developers in India and overseas.”

Last year, Nasdaq-listed ReNew Energy Global Plc raised a $100 million investment from British International Investment (BII), the UK’s development finance institution and impact investor, to accelerate the growth of its solar manufacturing business in India. As of May, ReNew Photovoltaics, its module manufacturing arm, had an operational 6.4 GW solar module facility in Jaipur and a 2.5 GW solar cell facility in Dholera, Gujarat.

It plans to use BII’s investment to grow the business and expand its manufacturing capacity by building a state-of-the-art 4 GW TOPCon cell facility in Dholera. Post-expansion, ReNew’s total manufacturing capacity will be about 6.4 GW of modules and 6.4 GW of cells.

RIL is another major player in this space, with a cell manufacturing capacity of 10 GW. Last month it said its heterojunction-based solar cell manufacturing facility in Jamnagar had been commissioned.

China factor and other hurdles

Over the past few years, the government has supported the solar ecosystem through the production linked incentive (PLI) scheme and high basic customs duties—40% on modules and 25% on cells—to achieve self-reliance. However, growth under the ₹19,500-crore PLI scheme has fallen short of expectations owing to Chinese supply constraints and a lack of visas for Chinese technicians, as previously reported by Mint. The government has already extended the scheme by another year – until 2027 – and a diplomatic thaw between India and China over the past year has somewhat eased the situation.

An industry executive, who did not wish to be named, said, “Given that China is the dominant player, Indian manufacturers and even other global players are bound to remain dependent on China for sub-components of solar modules. Backward integration is key, and that too will happen, but until then, supplies of wafers, ingots and polysilicon will remain dependent on China. However, the improvement in relations between the two countries bodes well for the sector. The industry will have to navigate such issues in the future, so backward integration at the earliest is key.”

Echoing this need for localization and reducing dependence on China, Sankalp Gurjar, assistant professor of geopolitics and geoeconomics at Gokhale Institute of Politics and Economics, said, “The recent ease in tensions comes in the backdrop of concerns in both countries since Trump became US president. Both India and China are trying to make it a functional relationship, but structural concerns remain, and the trade deficit remains. The central problems have not been solved.” In such a situation, India will have to lower its import dependence on China in critical sectors such as solar energy, he added.

Prices of solar cells and modules surged recently as China tightened its quota for wafer exports in December 2025. India’s renewable-energy space also faces operational issues as about 43 GW of renewable power is yet to be contracted and a significant capacity of power is curtailed on a daily basis in Rajasthan and Gujarat, owing to lack of transmission capacity.

Supply glut warning

The rapid growth of solar module manufacturing, which largely involves assembling cells, has sparked concerns of a supply glut, with the union ministry of new and renewable energy cautioning banks and non-banking financial companies (NBFC) against unregulated lending to solar module making companies.

In December 2025, the Ministry of New and Renewable Energy (MNRE) said it had informed the department of financial services and lenders such as PFC, REC, and IREDA about current domestic solar manufacturing capacities. It said these financial institutions should use this data to take a calibrated, well-informed approach when evaluating financing proposals. It also said lenders must expand their portfolios beyond just solar module facilities to include upstream stages—such as solar cells, ingots-wafers, and polysilicon—as well as ancillary components like solar glass and aluminium frames.

In a November report, ratings agency ICRA warned of potential industry overcapacity, as annual solar module production (60–65 GW) is expected to outpace annual installations (45–50 GW direct current). According to ICRA, India’s cell manufacturing capacity may reach 100 GW by December 2027.

Wafers and ingots next

The Indian government has also proposed bringing wafers under the ambit of ALMM by June 2028 to encourage module makers to use locally made wafers and ingots. In September 2025, Mint reported that the government planned to spend unused funds of about ₹5,500 crore under the PLI scheme on a fresh scheme to support local manufacturing of wafers and ingots. The union ministry of new and renewable energy has also been working on a scheme to support the domestic manufacturing of these two sub-components.

Currently, only Adani Solar can manufacture wafers domestically, though several other companies plan to set up wafer and ingot capacity in the coming years. Tata Power’s chief executive and managing director Praveer Sinha said in November that the company planned to set up a wafer and ingot manufacturing facility with a 10 GW capacity. Tata Power Solar has a cell manufacturing capacity of 4 GW.

Vineet Mittal, chairman of Brookfield-backed Avaada Group, told Mint in an interview in September 2025 that Avaada Electro, the company’s solar module manufacturing arm, planned to start manufacturing the entire chain of solar components and equipment locally from FY28. Currently, the company produces about 8.5 GW of solar modules annually. It is developing 6 GW of solar cell manufacturing capacity that is expected to be ready in 2026, and another 6 GW may come up by the end of 2027.