As the nation quickly expands its export capacity, India's exports of solar photovoltaic (PV) goods have increased 23-fold, reaching $2 billion between FY22 and FY24. Despite aiming for significant solar energy capacity for domestic use, this impressive expansion puts India in a position to become a net exporter of solar products.
As a major destination, the U.S. accounted for 97% of India's PV exports in FY23 and FY24. PV producers are selling high-value goods overseas as a result of delays in adopting India's approve list of Models and producers.
Although they emphasize the significance of increasing domestic capacity to gain long-term global market leadership, experts point out that this international focus could assist Indian businesses develop economies of scale and improve competitiveness. According to Vibhuti Garg, Director-South Asia at IEEFA, backward integration in PV manufacturing is crucial for India to access larger markets in Latin America, Africa, and Europe.
This development is further bolstered by the U.S. Inflation Reduction Act (IRA), which encourages Indian businesses to establish facilities abroad. By 2024, companies such as Waaree Energies and Vikram Solar intend to open large-scale manufacturing facilities in Texas and Colorado, respectively. Additionally, to fulfill the increasing demand, Saatvik Energy, Navitas Solar, and Premier Energies are setting up manufacturing facilities in the United States.
India's domestic solar aspirations must be balanced with global demand, though. Given that India wants to produce 500 GW of renewable energy by 2030, experts warn that exports may have an impact on domestic supply, especially for rooftop solar panels for homes. The founder of JMK Research, Jyoti Gulia, points out that this price-sensitive market may be impacted by low supply for smaller purchases.
India is forecast to produce 28 GW of solar modules by FY25 and 35 GW by FY26, but exports may only leave 21 GW and 25 GW for domestic use, respectively. This is less than the 30 GW required yearly to meet India's 2030 ambitions. This deficit would increase India's solar import costs, which are expected to increase from $7 billion to $30 billion a year by 2030, mostly as a result of imports from China.
Even though local manufacturing is encouraged by India's Production Linked Incentive (PLI) program, the industry still depends mostly on imported inputs, with assembly adding only 15% of the value. Few Indian companies use imported polysilicon or wafers to make solar cells, which might contribute 30–40% local value, according to the Global Trade Research Initiative (GTRI).
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