The Indian government’s decision to extend the Approved Lists of Models and Manufacturers (ALMM) to solar cells from June 1, 2026, is driving the rapid growth of solar cell manufacturing in India.
CRISIL Market Intelligence and Analytics said domestic PV cell manufacturing capacity will more than quadruple to 43 GW to 47 GW by June 2026, up from 10 GW in March 2024. Meanwhile, average annual demand is expected to reach 40 GW to 45 GW between fiscal years 2027 and 2030.
“While supply of solar cells should be enough based on current market announcements, there could be a transient shortfall till manufacturing ramps up,” says Sehul Bhatt, director of research at CRISIL Market Intelligence and Analytics,
Timely commissioning of announced projects will be crucial to meet demand, factoring in typical utilization rates and other uncertainties.
High prices of domestically made cells could also influence tariff bids in solar power project auctions.
“The prices of Indian solar cells today are 1.5 to two times more than alternatives from China even after basic customs duty,” said Bhatt. “Such high prices can drive up the capital cost of solar power projects by INR 5 million/MW to INR 10 million/MW and require tariff increase(s).”
The ALMM cell mandate may challenge companies lacking domestic cell manufacturing capability. Non-compliance could lead to module-supply issues, potentially affecting their market share over the long term.
“Of the 62 GW of installed capacity as of December 2024 owned by 79 entities, only 13 have an integrated cell manufacturing base. The rest will have to decide between expanding capacity or competing for domestic cell supplies,” said Surbhi Kaushal, Associate Director od research at CRISIL Market Intelligence and Analytics. “Although 12 non-integrated players have announced plans to install 32 GW capacity by 2029, the relatively higher capital cost of cell manufacturing plants compared with module assembly lines, and falling prices of the solar value chain could slow things down.”
CRISIL said that there have been more than 55 GW of capacity announcements under the production-linked incentive (PLI) scheme and other initiatives.
