A major change in India’s solar sector that mandates the use of only domestically manufactured cells from June 1 aims to cut the dependence on imports, particularly from China. From a long-term perspective, both for purposes of energy security and adoption of renewable energy, it’s a commendable step. Developers are already required to use domestically manufactured modules. Now, the cells inside those panels must also come from government-approved Indian manufacturers for a wide range of projects. Given the global headwinds, there is little choice but to work towards building a complete domestic supply chain. The challenges are manifold, and any misstep can put the brakes on India’s evolving engagement with the solar rooftop panel.
India has an annual solar module manufacturing capacity of nearly 200 GW, but its solar cell production is only around 30 GW. Handholding the industry to ramp up production while maintaining quality standards is one aspect. Narrowing the price difference with imported supplies is another. No less important is negotiating the supply-demand gap in the transition period. Installation of rooftop solar panels is bound to get costlier because of higher domestic production costs. The sudden shortfall of panels, too, can act as a deterrent to adopting clean energy. The Centre needs to be prepared for quick-fix strategies for its self-reliance roadmap.
The new rules will test the resolve of customers as well as developers and manufacturers, particularly smaller enterprises wary of monopolies. The critical role of enforcement and monitoring mechanisms cannot be overstated. As with solar panels, where imported supplies continue to be used because of lower costs, a similar situation could emerge with regard to imported solar cells. The lack of digital traceability and verification only leads to misuse and corruption. A compliant vendor losing out to readily available cheaper and dodgy alternatives made by circumventing the norms defeats the purpose of the exercise.
