India’s Solar PV Export Boom: Opportunities and Challenges

India’s solar photovoltaic (PV) exports have skyrocketed, increasing 23-fold to $2 billion between FY22 and FY24. This growth positions the country as a net exporter of solar products while highlighting key dynamics in domestic and international markets.

Global Solar PV Export Surge

The U.S. has been the primary destination for India’s solar PV exports, accounting for 97% of shipments in FY23 and FY24. This dominance stems from high-value exports and India’s delayed adoption of the Approved List of Models and Manufacturers (ALMM), which incentivized companies to target global markets.

Indian PV manufacturers, such as Waaree Energies and Vikram Solar, are expanding their global footprint, with plans to open manufacturing facilities in Texas and Colorado, respectively. Other firms, including Saatvik Energy and Navitas Solar, are following suit, spurred by the U.S. Inflation Reduction Act (IRA), which offers incentives for clean energy investments.

Balancing Domestic and Export Markets

While exports help Indian manufacturers achieve economies of scale and improve competitiveness, they present challenges for India’s domestic solar goals. Experts like Jyoti Gulia, founder of JMK Research, warn of supply shortfalls for domestic rooftop solar panels, a critical component of India’s renewable energy transition.

India’s ambitious target of 500 GW of renewable energy by 2030 requires annual solar installations of 30 GW. However, with projected module production of 28 GW by FY25 and 35 GW by FY26, exports may leave only 21–25 GW for domestic use—falling short of the required capacity.

This shortfall could lead to increased reliance on imports, particularly from China, potentially raising India’s solar import bill from $7 billion to $30 billion annually by 2030.

Challenges in Local Manufacturing

Despite the Production Linked Incentive (PLI) program, India’s solar manufacturing ecosystem remains reliant on imported inputs, such as polysilicon and wafers. Assembly currently adds just 15% of the product value domestically. Experts emphasize the need for backward integration—developing local capabilities to produce solar cells and modules from raw materials—to enhance India’s global competitiveness and reduce dependency on imports.

Opportunities for Global Market Leadership

India’s export success provides a valuable opportunity to solidify its position in the global solar market. Backward integration and enhanced domestic manufacturing could enable Indian companies to tap into emerging markets in Latin America, Africa, and Europe, as highlighted by Vibhuti Garg of IEEFA.

Additionally, the growing international presence of Indian manufacturers strengthens global partnerships and access to advanced technologies.

Strategic Path Forward

To balance its domestic and export ambitions, India must:

1. Expand Local Production: Increase manufacturing capacity to meet both domestic demand and export commitments.
2. Invest in Backward Integration: Develop local capabilities to produce solar cells and modules from basic inputs.
3. Optimize Policy Incentives: Strengthen policies like the PLI program to reduce reliance on imported components.
4. Target Emerging Markets: Diversify export destinations beyond the U.S. to reduce dependency on a single market.

By addressing these challenges, India can sustain its export momentum while ensuring that its domestic renewable energy goals remain on track, securing its position as a global leader in the solar energy sector.