India’s solar cell capacity set to nearly double to 60 GW this fiscal, Crisil says
Domestic solar cells are expected to meet around half of India’s total solar cell demand in fiscal 2027, up from about one-fourth in the previous fiscal, driven by the implementation of the Approved List of Cell Manufacturers (ALCM) and rapid capacity expansion, according to Crisil Ratings.
The agency said the shift will reduce dependence on imports, although large-scale capacity additions could pressure utilisation levels, realisations and returns for new manufacturers.
ALCM to drive domestic demand
Following the implementation of the Approved List of Models and Manufacturers (ALMM) from April 1, 2024, the Ministry of New and Renewable Energy (MNRE) introduced the ALCM to promote domestic solar cell manufacturing.
The ALCM became applicable from June 2026 for utility-scale projects with bid submission dates after August 31, 2025, and for net-metering and open-access projects commissioned after June 1, 2026. Residential rooftop consumers under the PM Surya Ghar: Muft Bijli Yojana “Give It Up” category are exempt until March 31, 2027.
According to Crisil Ratings, domestic manufacturers are expected to supply around half of the estimated 60-65 GW solar cell demand this fiscal, with imports meeting the remaining requirement.
Manish Gupta, Deputy Chief Ratings Officer at Crisil Ratings, said demand for indigenous cells will come from new utility-scale projects, net-metering and open-access installations, and schemes such as Kisan Urja Suraksha Evam Utthaan Mahabhiyan (KUSUM). Import dependence is expected to decline from next fiscal as the existing pipeline of projects using imported cells is exhausted.
Capacity set to double
To meet rising demand, manufacturers are expanding production capacity. Crisil Ratings expects India’s solar cell manufacturing capacity to nearly double to around 60 GW by the end of this fiscal, with additional capacity planned thereafter.
However, the agency warned that the surge in capacity could affect project economics.
Ankit Hakhu, Director at Crisil Ratings, said payback periods for capacities commissioned by the end of this fiscal could extend by one to two years compared with the four to five years achieved by early movers that benefited from higher premiums and stronger utilisation levels.
ALMM III and key risks
Crisil Ratings said manufacturers expanding into ingot and wafer production could see better returns if ALMM III is implemented from June 2028 as proposed. The framework is intended to deepen domestic value addition by introducing sourcing requirements for ingots and wafers, which are currently largely imported.
The agency also identified delays in power purchase agreement (PPA) signings and potential ALCM exemptions for certain net-metering and open-access projects as key factors that could affect demand for domestically manufactured solar cells.
The featured photograph is for representation only.
