India solar module factories shut after domestic cell mandate
This digest was compiled by AI from multiple sources — links to the originals are below.
Nearly a third of India's small and medium solar module makers have shut down since June 1, when a new law took effect requiring them to use domestically produced cells, Reuters reported. The closures put investments worth some $4 billion at risk, industry sources said. The mandate has caused a component shortage, as local cell manufacturing capacity of 27 GW falls far short of module capacity of 200 GW.
The Mandate
India's new legislation, effective June 1, mandates that solar module makers use only domestically produced cells. The policy aims to reduce dependence on Chinese imports, which previously accounted for over 90% of cells used by Indian module makers, according to Reuters. Industry experts had warned the government that the move would raise module prices and slow solar capacity expansion.
Factory Closures
Close to a third of India's small and medium solar module makers have shut down since the law took effect, Reuters reported, citing unnamed industry sources. The small and medium segment makes up 60% of total module production. One panel maker told Reuters that production is expected to drop from 3.2 GW to just 1 GW due to the unavailability of domestic cells.
Capacity Gap
India's solar cell manufacturing capacity stands at only 27 GW, while module capacity is 200 GW, creating a gap of about 2.6 GW annually. The government targets 500 GW of non-hydrocarbon generation capacity by 2030, with solar accounting for 29% of that. Plans to expand solar from 162 GW to over 292 GW by 2030 are now under threat.
What's Next
The Indian government may need to reconsider the mandate or accelerate domestic cell production to prevent further factory closures. It remains unclear whether the policy will be adjusted to allow temporary imports or if the 2030 solar target will be revised downward.
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India solar module factories shut after domestic cell mandate
