The Ministry of New and Renewable Energy (MNRE) is formulating a strategic plan to establish a self-reliant solar manufacturing ecosystem in India by 2028. This initiative aims to achieve complete indigenous production across the entire solar value chain, from raw materials like polysilicon and ingots to finished solar modules, thereby reducing import dependency and enhancing India’s energy security.

Understanding the Solar Manufacturing Value Chain

The solar value chain involves the complete sequence of converting raw materials into operational solar PV modules. It is broadly categorized into two segments:

1. Upstream Manufacturing: This is the most technologically complex and capital-intensive part of the chain. It includes:

   • Polysilicon: Derived from quartz sand, this is the ultra-pure base material.

   • Ingots & Wafers: Polysilicon is melted and crystallized to form large blocks called ingots, which are then sliced into ultra-thin wafers.

   • Solar Cells: Wafers are processed through doping, printing of metal contacts, and coating to create solar cells that convert sunlight into electricity (the photovoltaic effect).

2. Downstream Manufacturing: This segment is more focused on assembly and is relatively labor-intensive. It includes:

   • Module Assembly: Solar cells are interconnected, laminated, and framed to create a durable, weather-proof solar module.

   • System Integration: Modules are installed with inverters, mounting structures, and other components to create a functional solar power system.

Current Status in India: While India has achieved a significant module manufacturing capacity of 100 GW, there is a critical gap in the upstream stages. The nation’s solar cell capacity is only 27 GW, and the capacity for ingots and wafers is a mere 2.2 GW. This disparity highlights a heavy reliance on imports, particularly from China, for core components like cells and wafers.

Challenges to Developing an Indigenous Solar Value Chain

Several hurdles impede India’s progress toward self-sufficiency in solar manufacturing:

• High Capital & Technology Intensity: Upstream manufacturing, especially for polysilicon and wafers, requires massive capital investment and access to sophisticated, proprietary technology, where India currently lacks domestic expertise and scale.

• Economic Viability Issues: Due to a lack of economies of scale, domestically manufactured components are often more expensive than imports, making them less competitive in the short term.

• Infrastructure and Procedural Bottlenecks: Delays in land acquisition and securing Right of Way (RoW) clearances hinder the timely setup of large-scale manufacturing plants and solar projects.

• Procurement Delays: Delayed signing of Power Purchase Agreements (PPAs) by state distribution companies (Discoms) creates financial uncertainty and hampers project viability, which in turn affects demand for domestic modules.

• Supply Chain Vulnerability: The overwhelming dependence on imports for crucial raw materials and components exposes India’s solar mission to geopolitical risks and global supply chain disruptions.

Government Initiatives and Way Forward

To address these challenges and foster a robust domestic ecosystem, a multi-pronged strategy is required.

Key Government Steps:

• Approved List of Models and Manufacturers (ALMM): The government proposes to expand the ALMM, which currently covers only modules, to include cells, wafers, and ingots. This policy acts as a non-tariff barrier, ensuring that project developers use high-quality, approved domestic products.

• Production Linked Incentive (PLI) Scheme: The scheme provides financial incentives to companies for setting up integrated manufacturing facilities for high-efficiency solar modules.

• Flagship Deployment Programs: Schemes like the PM Suryaghar Yojana (for rooftop solar) and PM-KUSUM (for agricultural solar pumps) are creating sustained domestic demand, which is crucial for supporting local manufacturing.

Recommendations for the Future (The “SHINE” Approach):

• Sustain Policy Support: Ensure long-term policy stability through the consistent implementation of ALMM, the PLI scheme, and calibrated customs duties to protect domestic industry.

• Harness Investment: Create a favorable environment for attracting large-scale investment in Greenfield manufacturing projects by streamlining clearances and providing capital support.

• Innovation & R&D: Establish a robust R&D ecosystem to focus on next-generation technologies like Perovskite solar cells and develop ancillary industries for components like glass and backsheets.

• Navigate Coordination: Improve synergy between central and state governments to fast-track project execution and ensure the financial health of Discoms for timely payments.

• Expand Demand: Continue to drive domestic demand through ambitious deployment targets and consistent policy enforcement.

Conclusion

Building an indigenous solar manufacturing value chain is a strategic imperative for India. It is central to achieving Aatmanirbharta (self-reliance) in the energy sector, ensuring supply chain resilience, and successfully meeting ambitious climate goals, including generating 500 GW from non-fossil fuels by 2030 and achieving Net Zero emissions by 2070. An integrated roadmap that addresses policy, investment, and technological gaps will not only enhance India’s energy security but also position it as a global leader in solar energy.

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Q. Consider the following statements: (2016)

1. The International Solar Alliance was launched at the United Nations Climate Change Conference in 2015. 
2. The Alliance includes all the member countries of the United Nations. 

Which of the statements given above is/are correct? 

(a) 1 only  

(b) 2 only 

(c) Both 1 and 2 

(d) Neither 1 nor 2 

Ans: (a)

Q. India has immense potential for solar energy though there are regional variations in its developments. Elaborate. (2020)