Priyanka Tiwari
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If steps are not taken to improve domestic component manufacturing, India’s solar mission might turn out to be a heavily import-driven endeavor dominated by China, as aid industry sources have cautioned.
India’s demand for components, such as ingots and wafers, needed to convene cells and modules, is set to increase given the target of 280-300 gigawatts (GW) solar power capacity by 2030.
Due to the intervention of the Government, domestic manufacturing solar panels and cells is on the rise. However, these factories have not been able to integrate further backward into the production of ingots and wafers from polysilicon, a vital material for the solar industry, due to the lack of tariffs and other protective trade barriers. Most of these businesses have to rely on China for these products, as they are available at a much more competitive price.
"As such, the government may choose to subsidize or impose an anti-dumping duty on imports of ingot, polysilicon, and wafers, which are likely to improve local capabilities," explained one senior source at the New and Renewable Energy Ministry (MNRE).
The official also stated that it can also create a third approved list of models and manufacturers (ALMM) which would require their use in downstream cell and module manufacturing within the case of ingot/wafers.
In making solar cells which are used in solar photovoltaic modules or solar panels, polysilicon, ingots and wafers are used. To capture sunlight, solar modules or panels use crystalline silicon as an absorber.
Polysilicon, a high-purity type of silicon, is an essential material component of solar panels. First, polysilicon is melted to high temperatures to form ingots that are afterwards sliced into wafers. Finally, the wafers are fabricated into photovoltaic (PV) cells.
Another official said that despite meetings, no decision has been taken as it is technologically and raw material intensive to manufacture polysilicon having a high purity silicon. Electricity is not the only requirement, quartz also has to be mined from a silica.
An official said the government might want to restict the use of imported polysilicon while focusing on locally sourced offs for fabricating wafers and ingots.
Polysilicon, wafers and ingots are imported:
The country is unable to construct anything past solar panels and cells; as such, India is bringing in all of its ingots, wafers and polysilicon.
At present, the domestic capacity for manufacturing solar panels is not less than 70 gigawatts (GW), with the capacity for cell modules being at 8 GW. Approximately 3-4 years ago, the capacity for module and cell manufacturing was virtually non-existent. This growth can be credited to a combination of government initiatives, which include the imposition of a basic customs duty on solar modules, development of an Approved List of Models and Manufacturers (ALMM), and provision of Production Linked Incentives (PLIs) schemes.
As per estimates from CareEdge Ratings, India is likely to reach a module capacity of 120 GW by FY27
The capability for manufacturing solar cells is estimated to more than quadruple from 10GW in March 2024, to 43-47 GW by June 2026. CRISIL Market Intelligence and Analytics estimates average annual demand to fall between 40 and 45GW for fiscal years 2027 to 2030.
While the manufacturing of panel and cell combinations has been set into motion, there are growing concerns among stakeholders within the industry regarding ingots, wafers, and polysilicon, which are being imported from China.
Not enough under the PLI scheme
The current PLIs are set to a total capacity of only 15.4GW, which includes polysilicon, wafers, cells, and solar panels. These are currently being built by Reliance Industries, First Solar, and Indosol Solar Pv Ltd.
Another bucket of 16.8 GW is allocated towards the “wafer to cell to module” production which is being set up by Waaree Group, Avaada, JSW Group, ReNew, and Grew Energy Private Ltd.
Currently, India only has 2 GW of wafer and ingot production capacity, which is owned by the Adani Group and does not have a PLI.
“A new capital grant scheme for new wafer, ingot, and polysilicon manufacturing, as well as lower interest rate loans and domestic investment subsidizing, is essential. These entities should also be able to receive accelerated depreciation for plant and machinery and lower corporate tax rate,” said the Indian Solar Manufacturers Association (ISMA) in their presentation to the government.
It also asked for timelines and a road map for duty shielding of imported polysilicon, ingot, and wafer and also proposed an ALMM for those materials.
