India’s solar sector at an inflection point as risks of oversupply, trade disruptions looming industry: Report
(source : ANI) ( Photo Credit : ani)
India’s solar sector is hitting a crucial turning point, where booming demand, global trade changes, and new tech trends will decide which companies thrive and which ones struggle, says a fresh report from Yes Securities.
In recent years, India’s solar industry has grown at lightning speed. The country’s module manufacturing capacity has jumped to almost 100 GW, while cell production has already surpassed 25 GW. This surge comes thanks to government boosts like the Production Linked Incentive (PLI) scheme, Basic Customs Duty (BCD), the Approved List of Models and Manufacturers (ALMM), and big investment announcements from major players.
But here’s the catch: just having massive scale isn’t enough to keep risks at bay. The report points out a big worry—mismatches between supply and actual demand. “The sector now sits at an inflection point where policy, input markets, demand signals, trade flows, and technology shifts will determine which players survive and who gets squeezed,” it warns.
India’s solar module capacity shot up from the high teens to nearly 100 GW in no time. Industry plans suggest it could climb to 160-170 GW by 2028. That’s impressive, but if domestic solar tenders, exports to markets like the US and EU, or rooftop solar installations slow down, factories could run way below full capacity. That would squeeze profits and lead to tough times for solar manufacturers in India.
Oversupply isn’t just a far-off fear—it’s already showing up with inventory piles and falling prices in China and other parts of the world, the report notes.
Adding to the challenges, India’s solar manufacturing still relies heavily on China for key raw materials like polysilicon, wafers, and cells. China controls over 80% of the global supply in these areas, per the International Energy Agency. This dependence exposes Indian firms to supply shortages, wild price swings, and even trade or diplomatic hiccups.
Take polysilicon prices: they dropped sharply in 2024, but they’re still unpredictable, giving Chinese companies a big edge.
On a brighter note, Indian solar module exports have boomed, especially to the US. Yet, the report cautions that this growth hinges on unpredictable factors like the US Inflation Reduction Act (IRA), anti-circumvention rules, and potential anti-dumping duties in Southeast Asia. A sudden policy shift could slam the door on exports, leaving Indian solar producers with extra capacity and lower earnings.
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