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While India’s export is booming, experts highlight the need to meet the future local demand, especially with the 2030 energy targets and government’s ambitious solar schemes in consideration
In fiscal year 2024, Indian manufacturers exported about $2 billion worth of solar photovoltaic (PV) modules. (PTI)
India’s export of solar photovoltaic (PV) modules surged dramatically, increasing nearly 23 times in just two years between FY22 and FY24, according to a new report. This marks a significant shift for India, from being a traditional consumer and importer of solar modules to a net exporter.
The latest report released by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics showed that in fiscal year 2024, Indian manufacturers exported about $2 billion worth of PV modules. The United States emerged as the biggest market, accounting for more than 97 per cent of these exports. Three of the largest manufacturers in India — Waaree Energies, Adani Solar and Vikram Solar — accounted for most of the PV exports.
According to the report, a major factor behind this surge was the delayed implementation of the Approved List of Models and Manufacturers, which resulted in lower demand for domestic PV modules. Other countries are also increasingly viewing India as a viable alternative under their “China Plus One” strategy. Indian PV manufacturers, in turn, are eager to tap into the export market, where they can get much higher profit margins, despite the cost of logistics.
BUT CAN IT IMPACT GOVERNMENT’S SOLAR PROJECTS?
While the boom in export market is remarkable, and India could potentially replace Southeast Asia as the US’s main supplier of solar modules, the report expressed concerns over meeting the domestic market needs, especially with the 2030 energy targets and government’s ambitious solar schemes in focus.
This too at a time when the locally manufactured modules are already 30 per cent costlier than those manufactured abroad. India has committed to installing 500 GW of non-fossil fuel capacity by 2030 as part of its climate action. Additionally, the government’s ambitious schemes — the PM Surya Ghar and PM-Kusum — mandate the use of locally manufactured solar modules and cells.
“During periods of domestic supply shortage, segments such as residential rooftop solar could be affected due to their smaller order sizes. This can make it difficult for developers to secure enough supplies for their projects. The supply-demand gap could raise prices,” said co-author Jyoti Gulia, founder, JMK Research.
India’s annual PV module production is projected to reach 28 GW by FY2025, but with a significant portion of production earmarked for export, the country may fall short of meeting its own domestic needs to achieve its 2030 renewable energy targets.
“India is on the cusp of an energy transition revolution, with solar technology being a critical enabler. It is important to ensure that India meets its domestic demand while simultaneously establishing itself as a viable alternative to Chinese-origin PV products,” said Vibhuti Garg, director-South Asia, IEEFA.
While India should continue to leverage its advantageous position in the US market, as it is one of the largest solar markets in the world in terms of both installations and technology adoption, it must strike a balance between meeting international and domestic demand, the report recommended.