5 September 2025
AP News
News Coverage
JAIPUR, India (AP)
— On the edge of Jaipur, an Indian city known for its colorful bazaars and
palaces, a bustling industrial complex is the epicenter of the country’s push
to compete with China in making components for solar technology.
India, the world’s
most populous nation, is jockeying for market share against the global leader
in solar in part by selling to its own citizens, which helps the country with
its other goal: meeting growing domestic demand for electricity.
In the
government-subsidized zone that provides tax breaks, solar manufacturer ReNew’s
sprawling factory makes enough modules to produce 4 gigawatts of power each year
— equivalent to the energy needed for approximately 2.5 million Indian homes.
The 2-year-old facility that employs nearly 1,000 people serves as a symbol of
the solar industry’s momentum. India’s capacity to build key solar components
more than doubled in the fiscal year ending in March.
“When I got this
opportunity, I was really happy that I was directly contributing to the clean
energy transition,” said Monisha, an engineer at ReNew who goes by one name.
She said the work has helped her become independent and assist her family with
their finances.
India is harnessing solar power
After years of
expanding coal production, India has installed enough solar capacity in the
past five years to power tens of millions of homes.
The country still
faces a steep climb in its efforts to develop solar manufacturing that could
one day rival China, which makes more than 80% of all solar components in the
world and supplies key materials to Indian manufacturers.
India’s solar
industry must also contend with a tougher sell to its biggest foreign customer,
the United States. President Donald Trump’s tariffs of 50% on Indian goods took
effect last month, while Trump’s administration and Republican lawmakers have
taken other steps to hinder U.S. adoption of solar and other clean energy.
Still, India’s
clean energy appetite is helping its solar manufacturers deal with the external
pressures. Energy analysts said India’s domestic demand for solar power will
likely reduce disruption from tariffs imposed by the U.S., where about a third
of the solar panels produced by India were sold in a recent fiscal year.
Proceeds from selling in the lucrative U.S. market have helped Indian solar
manufacturers update their supply chains in recent years so they were less
dependent on imported Chinese parts and materials.
While Indian solar
manufacturers can sell at higher prices abroad, ambitious domestic clean energy
targets and domestic demand will help them find buyers within India if sales in
the U.S. slow, analysts said.
“This is a huge
industry that can absorb these modules and cells that are being produced. We
are not necessarily as export dependent as other countries are,” said Charith
Konda, an energy analyst at the Institute for Energy Economics and Financial
Analysis.
India’s domestic solar
market has already helped Hyderabad-based Vega Solar shift its customer base
for off-grid solar modules for RVs, electric fences and other uses to customers
in India in the years since the COVID-19 pandemic, said Vinay Keesara, a
company director.
“Before the
pandemic, 90% of my business was exports and 10% used to be domestic supply,
now this has just flipped the other way around,” he said.
Government policies, demand push solar industry’s growth
One of the most
carbon-polluting countries, India is making huge efforts to harness the power
of the sun and other clean energy sources. The cost of solar power — now half
that of new coal-powered plants — and India’s many sunny days are reasons that
experts said installed solar power increased 30 times in the last decade.
Before the U.S.
tariffs were announced, researchers with IEEFA and Gurugram, India-based JMK
Research wrote that India’s demand for solar modules during the next two years
could exceed what its manufacturers are selling within the country because so
many are being exported. India has also been importing solar modules from
China.
Konda said it was
too early to determine how the U.S. tariffs will affect Indian solar
manufacturers, but that the impact won’t be felt for at least another year because
solar component orders are placed well in advance. And uncertainty remains over
the fate of all of Trump’s tariffs. Despite a U.S. court ruling against Trump’s
tariffs, they remain in place until at least October while his administration
files appeals.
India has nearly
170 gigawatts of renewable energy projects in the pipeline — most of which are
solar — and are expected to be completed in the next few years. The country
also has an ambitious clean energy target of 500 gigawatts by 2030.
Government policies
restricting imports of solar components, incentives for solar manufacturers and
mandates for solar power producers to purchase material from
government-approved sources gave Indian companies the right signals to ramp up
solar manufacturing, said Sanjay Verghese, ReNew’s group president for solar
manufacturing and solar projects.
“We are in a good
phase right now,” he said. “We are highly dependent on policy support, but we
expect that momentum to be maintained.”
Despite supply chain bottlenecks, Indian manufacturing will
likely grow
India still depends
on imports of raw materials as well as finished solar components from China but
is making progress on reducing its reliance. Government data showed India
imported $1.3 billion worth of solar cells and modules from China in the first
quarter of the year, down by more than one-third from the same period a year
earlier. Cells are individual units that convert sunlight into energy, while
modules are made up of multiple cells.
Neshwin Rodrigues,
an analyst at climate energy think tank Ember, predicted that by 2030, India
might be in a position of needing to import only the raw material polysilicon
while producing other solar panel ingredients in the country.
According to
India’s renewable energy ministry, the country’s solar module manufacturing
capacity more than doubled to 74 gigawatts over the fiscal year ending March
2025. Solar cell manufacturing tripled in the same period, from 9 gigawatts to
25 gigawatts.
India still needs
Chinese raw materials because it lacks infrastructure to mine and process them,
but government initiatives to produce critical minerals are slowly addressing
the problem, experts said.
Shubhang Parekh of
the National Solar Energy Federation of India said the supply chains needed to
process the raw materials are still a work in progress, but he’s confident the
challenges can be overcome.
“The next few years
will be critical in determining how far we can go,” Parekh said.
