How Indian is a ‘Made in India’ solar panel, really?

So how Indian is a made-in-India panel? By value, mostly not. The cell, the heart of the panel, accounts for nearly 60% of its value, and almost everything a cell is made from is imported, Zele said, as is most of the glass, encapsulant, and aluminium framing.

That is because India has built its solar industry backwards, starting at the end of the chain.

Why did it do so? What has it cost the industry? And can India become a major alternative to China in global solar markets?

India’s solar manufacturing history: a head start, lost

India is not new to making solar panels. In the late 1990s and early 2000s, it was a major manufacturer of solar cells and modules, said Juzer Vasi, a professor emeritus at the Indian Institute of Technology (IIT) Bombay who was awarded the Padma Shri this year for his work in semiconductors and solar photovoltaics.

“In fact, if you go back 50 years, to 1976, one of India’s public sector undertakings, Central Electronics Limited (CEL), was among the first companies anywhere in the world to make solar cells and solar modules,” said Vasi. “India was exporting the modules to countries like Germany and the US in the 2000s.”

Then, in the 2010s, cheap Chinese modules flooded India and the rest of the world. “Cheap, but very high quality, I must add,” Vasi said. Indian manufacturers such as Tata Power Solar and Moser Baer could not compete, and much of the industry shut down or shrank.

The flood arrived just as India set out to scale up solar power. The Jawaharlal Nehru National Solar Mission (later National Solar Mission), launched in 2010 as part of the National Action Plan on Climate Change, had set a target of 20 GW of grid-connected solar power by 2022.

The mission had also brought Vasi into solar. In 2010, the Government of India’s principal scientific adviser asked him, then a semiconductor researcher, to set up a solar research centre at IIT Bombay to support it. It became the National Centre for Photovoltaic Research and Education (NCPRE), with Vasi as one of its two founding principal investigators.

As Chinese imports drove module prices down, the 20 GW target began to look modest. In 2015, India raised it five-fold, to 100 GW.

“At that time, a reasonable argument was made that our aim in India is to get electricity out to as many people and as cheaply as possible. And if other countries can make the modules, and all the components that go into it, more cheaply and efficiently, so be it, let us import from them,” said Vasi. In his view, though, it was a fallacious argument. “At some point, a situation was bound to arise where our great dependence on external supply chains would pose limitations.”

PLI and ALMM: built from the top down

“The PLI and the ALMM were sort of markers indicating that the government is seriously thinking of building manufacturing capabilities in this industry. The initial phases focused on module factories because it was the easiest part of the solar PV production. You just import the equipment, connect the lines and start making modules,” said Prabhakar Sharma, a senior consultant who tracks the renewable energy sector at JMK Research.

Tariffs pointed the same way. Since April 2022, imported modules have attracted a 40% basic customs duty, against 25% on cells. That, Vasi said, gave companies “an incentive to first set up module manufacturing and then go backward”.

On paper, the PLI was meant to pull investment upstream from the start. It pays more per watt the further up the chain a manufacturer integrates, and ₹12,000 crore of its ₹24,000 crore outlay was reserved for plants that go all the way back to polysilicon.

What has been built is lopsided, and none of it has yet drawn an incentive. Not a rupee had been paid out by the end of February 2026, MNRE told the Lok Sabha, because the money is released only a year after a plant starts production, and no awarded plant had reached that mark.

Even when payouts begin, Sharma expects them to stay small. Many bidders promised integration down to wafers and polysilicon, he said, but have so far built mostly the module and cell stages. “If you say that you are setting up an integrated cell, wafer and module factory, and you only set up the module part, the government will not disburse funds for that.”

The first PLI tranche in 2021 drew 18 bids for nearly 55 GW of capacity, which seemed enormous at the time, Sharma recalled. Today, the module list alone holds 225.5 GW, far more than the country installs in a year. “But when it comes to cells, the capacity is a little less, and at further upstream stages, it's almost non-existent,” he said.

The import bill tells the same story. As tariffs and the ALMM shut out finished panels, India bought fewer modules from abroad and more of the cells to put inside its own. In 2025-26, module imports fell by more than half, to about $1 billion, while cell imports nearly doubled, to about $3.1 billion.

The cost of building backwards

The result is an industry with more factories than work. India’s module plants are running at an estimated 35-40% of capacity, well short of the 50-65% needed for sustainable operations, according to a September 2026 report by JMK Research and the Institute for Energy Economics and Financial Analysis (IEEFA). Sharma, who is also the lead author of the report, said, “Many domestic module manufacturers are actually not able to supply to the market because they don’t have access to the mandatory India-made cells.”

That is because most of India’s cells never reach the open market. Of the roughly 35 GW of cell capacity the report counts, nearly 33 GW belongs to integrated companies that use the cells in their own modules, leaving roughly 2 GW for everyone else, the report estimates. It counts 45-50 GW of module capacity, mostly small assemblers, older PERC lines and firms with no plan to integrate, as at risk of consolidation or closure.

“There is a probable risk of some manufacturers exiting the market in the next four or five years, or they might scale down their operations or merge with a bigger entity,” Sharma said.

Polysilicon, ingots and wafers: should India have started upstream?

Going upstream would mean starting with the raw material, and on paper India has enough of it. The last national count, as on 1 April 2015, put the country’s quartz and silica sand reserves at 647.53 million tonnes, according to the Ministry of Mines’ Indian Minerals Yearbook. Not all of it is fit for polysilicon, though.

“You have to find the right quality of quartz. You can’t just get it by picking up sand from the beach,” said Vasi. But the raw material is “not the constraint at all”, he added. The constraint lies in the steps that follow: refining silicon into polysilicon and then crystallising it into ingots are both extremely energy- and capital-intensive, and electricity ends up being a large share of the cost of production.

India has been here before. About 50 years ago, Vasi recalled, there was a push to make silicon ingots and wafers in India for the semiconductor industry. A few small units came up, but none succeeded, because importing was always much cheaper.

The cost of power, which such manufacturing consumes in vast amounts, has long deterred India. For China, cheap power became central to its rise as the world’s leading solar manufacturer. And India is hardly alone in depending on it. According to the Crisil report for NITI Aayog, China held 82% of the world’s module capacity, 91% of cell capacity and 95% of wafer capacity, and accounted for 93-98% of polysilicon production in 2024.

That dependence has a flip side, Vasi said. “Everyone in the world is dependent on China. So we all got stuck there. But we also benefited hugely, because the dramatic reduction in the cost of solar is uniquely due to China’s prowess in technology as well as in manufacturing.” You have to look at both the plus and the minus sides of China’s dominance, he said.

“China really started working on solar technology around 2000,” said Vasi. “At that time nobody really felt the impact because China worked under the radar for almost 10 years or so. It's only in the early 2010s that we started to see high-quality, low-cost modules coming out of China.” All that time, he said, the industry was being funded by the Chinese government and the provinces.

Before 2009, provincial and local governments offered China’s new solar firms cheap land and electricity, low-interest loans and tax relief, while Beijing gave little direct support, according to a 2020 study by the Information Technology and Innovation Foundation (ITIF), a US think tank.

The motive was energy security. China has little oil of its own, and solar and wind offered a way to import less of it. “They foresaw this many years ago, and took appropriate action at an appropriate time,” Vasi said.

“Being the kind of society which they are,” he added, “it was easy for them to fund it very heavily without any of the repercussions other countries might have faced.”

China also built the whole chain in one place. “In China, the same industrial ecosystem comprises all the parts of the supply chain from polysilicon to module, thereby reducing the transportation cost,” said Soumitra Satapathi, the founding head of the Center for Sustainable Energy at IIT Roorkee. “They have developed several manufacturing clusters where you can get electricity at a very low cost for such energy-intensive manufacturing.”

Those factories also had a vast market at home. “China has an enormous domestic market as it has installed solar PV enormously. That gives manufacturers a guaranteed market,” Satapathi said. “India’s domestic solar PV market has not matured the way China’s has.”

So would India have done better to start with polysilicon? Vasi thinks not. Starting there, he argued, would have meant building polysilicon, ingot and wafer plants with no assured buyers, because India had no cell and module industry to absorb what they made. “It made sense to start making our own modules and then go backward, and that is the trend which we are seeing now,” he said.

Vasi also counsels patience. China worked on solar for a decade before the world noticed, he noted, whereas India got into manufacturing in earnest only in the early 2020s. “We have to give ourselves enough time to build up the whole potential and the ecosystem to be able to compete.” Until then, he said, the industry will need government support, though “not forever”.

The research gap with China

Staying competitive will take more than factories. It will take research, and the gap there starts with budgets. “Chinese companies have been investing significant amounts in R&D over the last decade”, said Zele, who led R&D at Waaree Energies before joining ReNew. “We are just starting.” China’s LONGi, one of the world’s largest manufacturers, spent about 5 billion yuan (roughly $700 million) on R&D in 2024, about 6% of its revenue. Indian manufacturers’ R&D spending, by Crisil’s account, is negligible.

Nor is the state making up the difference. MNRE had disbursed only about $19 million for R&D by December 2024, according to the Crisil report. In China, the state built research into the companies themselves, placing national key laboratories inside the headquarters of leading solar firms, the ITIF study notes.

“The leading companies in solar in the world are of course the Chinese companies. LONGi, for example, has about 700 full-time R&D people. India, across industry and academia, has just a couple of hundred people, by my count, working specifically on solar technology R&D,” said Vasi.

Indian manufacturers have mostly bought their technology rather than built it, Zele said: “We are going for technology transfer or getting the know-how and then building it here.” The test of real research is publications and patents, she said, and by that test “very few Indian solar manufacturers have really invested in generating IP of that order”.

In China, Satapathi said, a whole supplier industry for equipment, chemicals and gases grew up around the solar clusters, and heavy state funding kept manufacturers competing to improve yields and automation. “Everywhere you go, you will see Chinese equipment,” he said. “If China doesn’t sell the equipment, you cannot make those cells and modules.”

“The Chinese equipment is the cheapest and also actually amongst the best in the world. Right now, all our equipment for solar manufacturing is coming from China, and to a lesser extent from Europe. If we want a fairly resilient supply chain, we must also start looking at the equipment,” said Vasi. That calls for skills India is short of, he added: equipment-making is essentially manufacturing and robotics, not the semiconductor expertise the solar industry has drawn on so far.

That dependence is now being tested. On 16 October 2026, China’s commerce and science ministries proposed export controls on 12 solar technologies, including those for making polysilicon and wafers and for advanced cells such as perovskite and tandem cells, citing national security.

Zele doubts the curbs will bite. Chinese companies have too much invested in technology they need to sell abroad, she said: “They are dependent so much on us as much as we are dependent on them.” Unless the move turns political, she expects Beijing to draw “fine lines” between technologies. Similar curbs in the past caused Indian manufacturers only short-term trouble, recalled Zele.

“So, what is the consequence of not investing in R&D? If there is a technology change, which is happening very rapidly — from mono PERC to TOPCon to HJT to back contact to tandem — we are not able to keep up with this changing technology,” said Satapathi.

“Eventually, whatever China decides becomes the mainstream technology,” Vasi said. Indian manufacturers are adapting. “PERC was the dominant technology until last year”, Zele said, “and now everybody is kind of switching or adding lines of TOPCon”.

Each new generation of cell turns more of the sunlight that falls on it into electricity, Satapathi explained. A cell that is 20% efficient converts 20 watts of every 100 watts of sunlight into power, and the rest is lost. Buyers want more power, even in diffused light, at a lower cost and from smaller panels, he said, and that can come only from research and innovations in material science.

No single company can build that research base, Vasi argued, “even if it is as large as Adani or Reliance”. He wants the government, which he credits with good manufacturing policy, to fund a consortium of academic institutions working with industry.

Zele expects things to change eventually. “There is a lot of positive reinforcement for industry-academia collaborations. R&D labs from IISc and IITs are working with manufacturers,” she said.

Satapathi, whose lab at IIT Roorkee works on perovskite-silicon tandem cells and who has founded a startup to commercialise them, sees the needle moving slowly. “There are some changes happening, but it is still not that much optimistic. More work has to be done.”

Where will India’s surplus solar panels go?

The solar PV factories were built for a home market that has grown fast. Solar now makes up more than half of India’s roughly 299 GW of renewable energy capacity, according to MNRE data for 30 September 2026. In June 2025, non-fossil sources passed half of India’s installed power capacity, meeting its 2030 climate pledge five years early. At about 308 GW, that capacity is now a little over three-fifths of the way to the government’s target of 500 GW by 2030.

But that market has limits. Transmission lines from Rajasthan and Gujarat, where much of the solar is built, have not kept pace, Vasi said, so some of the power generated is already being curtailed. India may go a little slower on new installations, he said: “It doesn’t make sense to deploy a whole lot of solar and then simply not use it.”

So what happens to the panels India can make but cannot install? “What are we going to do with all this huge capacity?” Vasi asked. “Either many companies will simply lose a ton of money, or we can take advantage of our production to export to other countries.” Many countries, he said, do not want to rely on a single supplier, which, today, is China.

So far, almost all of India’s module exports have gone to one market, the US, where curbs on Chinese and South-east Asian panels had opened a gap that Indian makers filled. That kind of shelter, Sharma said, “does not exist anywhere else in the world”. The domestic-content rules do not cover exports, Zele noted, so manufacturers can still put imported cells in modules sold abroad.

Now the door is closing. In September 2026, the US Commerce Department finalised anti-dumping and countervailing duties on Indian solar cells and modules, at combined rates above 200% for some exporters, and in October the US International Trade Commission ruled that the imports had harmed American industry.

Elsewhere, Indian panels have to compete with Chinese ones on price. On cost and quality, India is “almost number two”, Zele reckons. “We can’t beat China yet.”

Europe offers the likeliest opening, the JMK-IEEFA report argues, because new EU rules on industrial resilience, foreign subsidies and forced labour begin to favour buyers who diversify away from China. Closer home, Sharma sees room in neighbouring countries and the Middle East, where Indian panels save on freight. JMK puts the additional export opportunity at around 8 GW by 2030, a fraction of India’s spare capacity.

If India “plays a long game”, Vasi believes, it can become not so much a rival to China as “an important additional country besides China” in solar manufacturing. For now, the ‘Made in India’ label on a rooftop tells you where a panel was assembled and, increasingly, where its cells were made. It says little about the wafer and polysilicon inside. How far up the chain that label can reach is a question India’s next round of factories, and the wafer rules due in 2028, will answer.

Design and illustrations were made with AI assistance.