India Poised to Become Second-Largest Module Manufacturing Hub by 2025

• 16 Nov 2023

According to a recent study, India, currently representing 3% of the global solar manufacturing market, is anticipated to emerge as the world's second-largest module manufacturing region by 2025.

• The consultancy firm attributes this projection to India's robust Production Linked Incentives (PLI) and notes that, outside China, India is predicted to surpass Southeast Asia in module production.

Key Points

• Global Ranking Projection: Wood Mackenzie's report forecasts India's ascent to the second-largest module manufacturing region by 2025, driven by strong PLI incentives.
• US and India's Module Capacity Plans: The report highlights that the US and India have jointly announced plans for over 200 gigawatts (GW) of module capacity since 2022.
• This surge is propelled by the Inflation Reduction Act (IRA) in the US and India's Production Linked Incentive (PLI).
• China Dominates Solar Industry Investments: Despite India's growth, China is expected to maintain over 80% of the world's polysilicon, wafer, cell, and module manufacturing capacity from 2023 to 2026, having invested over $130 billion in the solar industry in 2023.
• ICRA's Solar PV Module Manufacturing Outlook: ICRA anticipates India's solar photovoltaic (PV) module manufacturing capacity to exceed 60 GW by 2025, up from the current 37 GW. Backward integration into cell and wafer manufacturing is expected to contribute to this increase.
• International Energy Agency's Projections: The International Energy Agency (IEA) suggests that India's domestic production capacity could surpass 70 GW by 2027 under the Production Linked Incentive (PLI) scheme.
• Subsidies and PLI Scheme: India's PLI scheme, offering approximately $2.5 billion in subsidies, aims to expand solar PV module manufacturing capacity.
• The scheme has already awarded Letters of Award for setting up integrated solar PV module manufacturing units.
• Global Solar Manufacturing Landscape: Solar manufacturing is presently concentrated in five countries, with China leading by a wide margin.
• The other major contributors include Vietnam, Malaysia, Thailand, and India, each holding a significant share of the global market.
• The report emphasizes the concerted efforts worldwide to bolster solar manufacturing capacities.