India's PV capacity could reach 110GW by 2026

India could become the world's second largest photovoltaic producer by 2026, according to a survey released by research institutes. The country will also have a significant presence in all upstream component markets for PV production, such as PV cells, silicon rods/wafers and polysilicon.

According to the report, India's PV module capacity will reach 110GW by 2026, with 72GW of PV module manufacturing plants coming into operation in the next three years. According to the survey by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research, a substantial increase in India's PV module capacity will make the country self-sufficient and make it the world's second largest PV manufacturer after China.

According to the report, India will have a significant presence in all upstream module markets for the global PV manufacturing industry. The company claims that by 2026, India will have 59GW of photovoltaic cell capacity, 56GW of silicon rod/wafer capacity and 38GW of polysilicon capacity.

"The future of PV manufacturing in India is promising," said Vibhuti Garg, co-author of the report and head of research for South Asia at the Institute for Energy Economics and Financial Analysis (IEEFA). "The favourable policy environment created by the Indian government is helping PV manufacturing in the country to grow rapidly, This can be seen in the frequent announcements of expansions or new investments by players in the industry."

The report shows that the cumulative PV module production capacity in India has more than doubled from 18GW in March 2022 to 38GW in March 2023.

"The Production-Related Incentive (PLI) program is one of the major catalysts fueling the growth of the PV manufacturing ecosystem in India," said Jyoti Gulia, founder of JMK Research. In addition to increasing the infrastructure at all stages of PV product manufacturing, from polysilicon to PV modules, it will also facilitate the simultaneous development of the market for PV accessory components, such as glass, vinyl acetate (EVA) and backboards."

The results of the two parts of the production-related Incentive (PLI) program indicate that over the next three to four years, India's PV module capacity will increase by 51.6GW and its integrated capacity from polysilicon to PV modules will increase by more than 27.4GW.

While the production-related Incentive (PLI) program is a PV supply side measure, the Indian government has also taken steps to increase the demand for locally produced PV products. One such step is the introduction of domestic content requirements (DCRS) for PV products in several government schemes, including the PM-KUSUM scheme and the Central Public Sector Undertaking (CPSU) Scheme in India.

One of the key steps taken by the Indian government to drive domestic demand for PV modules is the introduction of the PV Module Manufacturers Approval List (ALMM) in 2019. Even if a higher basic tariff (BCD) is imposed on imported PV modules, the cost difference is negligible compared to domestic PV modules, the report noted.

"In this context, the ALMM list is a trade barrier to protect the interests of India's domestic PV module manufacturers," said Prabhakar Sharma, a consultant at JMK Research. So in the past year, the ALMM list has become an important driver for the development of the PV manufacturing industry in India. India's Ministry of New and Renewable Energy released its latest ALMM list on February 27, 2023, which includes more than 70 domestic manufacturers with registered capacity reaching 22,389MW, "it said.

The report also points out the obstacles hindering the development of India's domestic PV manufacturing industry. Chief among them is the over-reliance on Chinese imports of upstream components of PV modules, such as polysilicon, silicon rods and silicon wafers.