India’s solar revolution is more than a mission—it’s our commitment to self-reliance, economic strength, and global leadership in clean energy, illuminating a brighter future for generations to come. However, supply chain dependencies, particularly on China for critical components like wafers, cells, and inverters, have posed challenges to its vision of becoming a solar manufacturing hub. As India strengthens its domestic ecosystem through production-linked incentives (PLI), import restrictions, and R&D investments, it is not only securing its energy future but also positioning itself as a key player in the global solar supply chain. This article by Vanshaj Srivastava, Senior Manager – SCM Strategy and Ops, Reliance Industries Ltd., explores India’s journey from milestones to self-sufficiency and global leadership in the solar sector through a supply chain lens.
INDIA’S solar energy sector has witnessed a remarkable transformation, evolving from a nascent market to a global powerhouse in renewable energy. With ambitious government policies, largescale investments, and technological advancements, the country is now on the path to self-reliance in solar manufacturing. India has achieved a significant milestone by surpassing 100 gigawatts (GW) of installed solar capacity, positioning itself among the top five countries globally in solar energy deployment. This accomplishment not only enhances India's energy security but also aligns with its ambitious climate goals, aiming to reduce carbon emissions and promote sustainable development.
However, the journey doesn't end with capacity expansion. The real challenge lies in transitioning towards a self-reliant ecosystem that emphasizes domestic value chain development, technological innovation, and supply chain resilience.
Vanshaj Srivastava
INDIA'S POSITION IN THE GLOBAL SOLAR MARKET
India's solar capacity of 100 GW comprises approximately 80% utilityscale projects, 10% rooftop installations, and 10% off-grid solutions. The market is valued at over $17 billion and is experiencing a robust growth rate of 20% CAGR. Notably, India offers one of the most competitive solar tariffs globally, averaging around ?2.00 per kilo-watt-hour (kWh) ($0.027).
Regional Leaders
Rajasthan: Leading with 16.1 GW of installed capacity.
Gujarat: Pioneering in rooftop solar installations and innovative hybrid projects.
Tamil Nadu & Karnataka: Demonstrating strong growth in utility-scale and floating solar projects.
INVESTMENT NEEDS & JOB CREATION
To sustain this momentum, India requires an estimated investment of $25–30 billion annually until 2030. This investment is projected to generate over 500,000 jobs across manufacturing, operations, and research and development sectors.
Key Existing Policies
National Solar Mission (NSM): Laid the foundation for solar expansion in India.
Production-Linked Incentive (PLI) Scheme: Allocated ?24,000 crores to promote domestic manufacturing, with an expected addition of 65 GW in capacity.
Basic Customs Duty (BCD): Imposed a 40% duty on imported modules and 25% on cells to reduce import dependency.
KUSUM Scheme: Focuses on the solarization of agricultural pumps and decentralized energy generation.
Green Energy Corridor: Aims to enhance transmission infrastructure in renewable-rich states.
Policy Gaps & Recommendations
Upstream Manufacturing: There's a need to focus on the production of polysilicon, wafers, and ingots domestically.
Energy Storage Incentives: Clear policies to encourage domestic manufacturing of energy storage solutions are essential.
Regulatory Simplification: Streamlining processes for hybrid and floating solar projects can accelerate deployment.
R&D Boost: Public-private partnerships and dedicated funds are crucial to drive innovation in the solar sector.
SUPPLY CHAIN RESILIENCE: REDUCING DEPENDENCY ON IMPORTS
As of 2025, India’s solar supply chain is undergoing a transformative shift, driven by government policies, private sector investments, and a push for self-reliance. While India has made significant progress in solar capacity expansion and domestic manufacturing, critical challenges remain, particularly in upstream components like wafers, polysilicon, and high-efficiency module technologies.
India's solar industry faces significant challenges due to its heavy reliance on imports, particularly from China. Approximately 85% of modules, cells, and key components are imported, leading to vulnerabilities in the supply chain. Additionally, there's a lack of domestic capacity for critical components like wafers, ingots, and high-efficiency cells, as well as a limited ecosystem for manufacturing essential equipment such as solar inverters and tracking systems.
STRATEGIES TO BUILD A RESILIENT SUPPLY CHAIN
To mitigate these challenges, India must adopt a multifaceted approach:
Integrated Domestic Manufacturing: Developing a fully integrated domestic manufacturing base from polysilicon to modules is imperative. This includes establishing facilities for producing wafers, ingots, and cells, thereby reducing reliance on imports.
Global Collaborations: Encouraging joint ventures with international technology leaders can facilitate the transfer of advanced solar cell technologies, enhancing domestic capabilities.
Financial Support Mechanisms: Providing financial incentives such as preferential loans, tax breaks, and subsidies can attract investments in upstream manufacturing sectors.
Supply Chain Clusters: Establishing logistics hubs and manufacturing clusters near ports and industrial corridors can streamline operations, reduce transportation costs, and improve supply chain efficiency.
LOGISTICS & INFRASTRUCTURE NEEDS
Enhancing logistics and infrastructure is crucial for a resilient supply chain:
Dedicated Manufacturing Hubs: Setting up specialized solar manufacturing zones in renewable-rich states can capitalize on regional advantages and resources.
Efficient Transportation Networks: Developing robust transport and warehousing systems ensures the safe and timely delivery of components and finished products.
Smart Logistics Solutions: Implementing technologies like blockchain for supply chain transparency and automation for material handling can optimize operations and reduce inefficiencies.
THE IMPERATIVE OF VERTICAL INTEGRATION IN INDIA'S SOLAR SUPPLY CHAIN
Despite the impressive growth in solar installations, India's solar manufacturing sector faces several challenges:
Import Dependency: A significant portion of solar components, especially photovoltaic (PV) cells and modules, are imported, primarily from China. This reliance exposes the industry to geopolitical risks and supply chain disruptions.
Limited Domestic Manufacturing: As of December 2023, India's manufacturing capacity stood at 6 GW for solar cells and 37 GW for solar modules. This disparity indicates a bottleneck in the upstream segment of the supply chain, particularly in the production of critical components like polysilicon, wafers, and ingots.
BENEFITS OF VERTICAL INTEGRATION
Vertical integration involves consolidating multiple stages of production within a single company or consortium. For India's solar sector, this strategy offers several advantages:
Cost Competitiveness: By streamlining operations from raw material processing to final module assembly, companies can reduce variable costs, including transportation and tariffs, leading to more competitive pricing.
Supply Chain Resilience: Developing in-house capabilities for producing key components mitigates risks associated with import dependencies and global supply chain volatilities.
Quality Control: Managing the entire production process ensures adherence to quality standards, enhancing the reliability and performance of solar products.
INITIATIVES AND INVESTMENTS IN VERTICAL INTEGRATION
Recognizing these benefits, several Indian companies have embarked on vertical integration projects:
Reliance Industries: Through its Dhirubhai Ambani Green Energy Giga Complex in Jamnagar, Gujarat, Reliance is establishing a fully integrated renewable energy manufacturing hub. This facility aims to produce solar ingots, wafers, cells, and modules, with an initial 20 GW solar photovoltaic module factory expected to be operational by 2023. The company plans to double its capacity by 2026, contributing significantly to reducing import dependence.
Adani Group: Adani Solar is developing a comprehensive solar manufacturing ecosystem, encompassing the production of ingots, wafers, cells, and modules. This initiative aligns with India's goal of creating a self-reliant solar supply chain and reducing reliance on imports.
Tata Power: The company has invested in a 4.3 GW solar module and cell manufacturing facility in Tamil Nadu. While focusing on the domestic market, Tata Power's expansion plans include potential increases in capacity to meet growing demand.
Vikram Solar: With an existing module production capacity of 3.5 GW, Vikram Solar is moving towards a vertically integrated setup by planning a 3 GW solar cell manufacturing facility in Tamil Nadu and a similar capacity in the United States. This strategic move aims to enhance self-sufficiency and global competitiveness.
Waaree Energies: The company is implementing backward integration by setting up capacities for solar cells and ingot wafers. By FY27, Waaree aims to achieve capacities of 20.9 GW for PV modules, 11.4 GW for solar cells, and 6 GW for ingot wafers, thereby reducing dependence on imports.
TECHNOLOGY & DIGITAL TRANSFORMATION: A NEW GROWTH ENGINE
Advanced PV Modules: The shift from PERC (Passivated Emitter and Rear Contact) to TOPCon (Tunnel Oxide Passivated Contact) and HJT (Heterojunction Technology) modules is improving efficiency and durability.
Energy Storage Innovations: The emergence of solid-state batteries, sodium-ion batteries, and vanadium flow batteries is addressing intermittency and improving grid reliability.
Floating and Hybrid Solar Projects: Leveraging water bodies and hybrid solar-wind setups is enhancing space utilization and increasing power output.
DIGITAL INNOVATIONS
AI and IoT Integration
Predictive Maintenance: AI-powered diagnostics detect and prevent failures, reducing downtime and operational costs.
Performance Optimization: AI-driven analytics improve energy yield by fine-tuning system performance.
Grid Balancing: IoT sensors monitor power generation and consumption, ensuring stable grid operations.
Smart Grids and Digital Twins
Smart Grid Implementation: Advanced metering infrastructure and automated demand response help manage energy flow efficiently.
Digital Twins for Solar Farms: Digital simulations of solar farms help predict energy output and optimize plant design before deployment.
BLOCKCHAIN FOR ENERGY AND SUPPLY CHAIN MANAGEMENT
Transparent Supply Chain: Ensuring traceability of solar components from manufacturing to installation, reducing fraud and improving quality assurance.
Smart Contracts: Automating ransactions in power purchase agreements (PPAs) and peer-to-peer (P2P) energy trading.
Decentralized Energy Markets: Blockchain-based platforms allow consumers to trade excess solar energy, improving grid flexibility.
AUTOMATION AND ROBOTICS IN SOLAR MANUFACTURING AND O&M
Robotic Cleaning Systems: Enhancing efficiency by maintaining optimal module cleanliness without water wastage.
Automated Assembly Lines: Increasing production efficiency and precision in solar module manufacturing.
Drone-based Inspection: AI-enabled drones for real-time monitoring of solar farms to identify defects and optimize efficiency.
GOVERNMENT INCENTIVES & SUBSIDIES
The Production-Linked Incentive (PLI) scheme encourages investment in domestic solar manufacturing.
Capital subsidies for solar developers to promote rapid deployment.
Tax incentives such as accelerated depreciation and reduced GST for renewable energy equipment.
VENTURE CAPITAL & PRIVATE EQUITY INVESTMENTS
Supporting renewable energy startups in advanced solar technology and digital solutions.
Encouraging early-stage funding for innovative battery storage and smart grid technologies.
Increased participation of foreign institutional investors in India's solar market.
LOW-COST CREDIT FOR SMALL & MID-SCALE DEVELOPERS
Expanding access to concessional loans from International Financial Institutions (IFIs) such as the World Bank and Asian Development Bank.
Strengthening domestic financial institutions to offer lower interest rates for small-scale solar projects.
Developing community solar financing models to empower decentralized energy generation.
CORPORATE POWER PURCHASE AGREEMENTS (PPAs)
Large corporations are increasingly signing long-term PPAs with renewable energy providers.
India’s PPA market is growing rapidly, allowing commercial entities to procure clean energy at competitive rates.
FUTURE INVESTMENT TRENDS
Expansion of Green Finance Markets: Increased issuance of sovereign green bonds and sustainability-linked loans.
Public-Private Partnerships (PPPs): Government collaboration with private players to fund large-scale solar and energy storage projects
International Collaborations: Strategic alliances with global investors and technology providers to accelerate solar industry growth.
Decentralized Solar Financing Models: More community-led and distributed solar financing mechanisms to drive rural electrification.
THE ROAD AHEAD – FROM IMPORT DEPENDENCY TO GLOBAL LEADERSHIP
Building a Self-Reliant Solar Ecosystem: The 100 GW milestone is a strong foundation, but to sustain future growth, India must develop a self-reliant ecosystem integrating domestic manufacturing, supply chain resilience, and cutting-edge technology. Strengthening vertically integrated solar manufacturing, from polysilicon to module production, is key to reducing import dependence and achieving cost competitiveness
Role of Collaboration and Innovation: The government, private sector, and technology leaders must work together to drive innovation, enhance manufacturing capacity, and improve infrastructure. R&D in high-efficiency solar cells, battery storage, and AI-powered grid management will be pivotal for India's energy transformation.
India as a Global Solar Leader: With sustained investments in solar manufacturing and technology exports, India can transition from being a net importer to a global hub for solar components, storage solutions, and smart grid technologies. By leveraging competitive pricing, technological advancements, and policy support, India can position itself as a dominant force in the global clean energy market.
SUSTAINABLE AND INCLUSIVE GROWTH
Expanding decentralized solar financing and community-driven projects will drive energy access in rural India, ensuring inclusive growth. Strengthening green finance mechanisms and attracting global investors will ensure long-term economic and environmental sustainability.
END NOTE
India is at the crossroads of a clean energy revolution. While challenges remain in supply chain localization and energy storage, strategic investments, policy interventions, and technology integration will determine the pace of India's transformation into a global solar powerhouse. By capitalizing on its low-cost solar tariffs, expanding domestic manufacturing, and fostering innovation, India has the potential to not just meet its own energy needs but also lead the global transition to a sustainable future.
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