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India’s Solar Module Glut Threatens Factories With Low Utilisation
India has built many factories that make solar panels.
Together, these factories could produce far more panels than the market currently needs.
Most factories are running at only about one-third to two-fifths of their possible output.
More factories are still planned, which could make the problem worse.
Solar installations are growing, but not quickly enough to use all the new factory capacity.
Demand from large solar projects and exports has also weakened.
Some new demand may come from data centres and green hydrogen, but it may not be enough.
As a result, weaker manufacturers could be bought, shut down or left with unused equipment.
India’s solar module manufacturing capacity has reached 233 GW, but factories operate at only 35-40% utilisation.
Another 135 GW of capacity is planned or under construction, increasing risks of consolidation and stranded assets.
Module capacity is nearly seven times cell capacity and 116 times ingot-wafer capacity, leaving India dependent on imported inputs.
Utility-scale renewable energy tenders fell 47% to 24 GW in FY26, while exports face sharply higher United States duties.
About 45-50 GW of capacity, including older and small-scale facilities, is considered vulnerable to disruption, acquisition or exit.
- Who
- India’s solar module manufacturers, including smaller assemblers and companies with older production lines, are affected; the assessment was conducted by IEEFA-JMK Research.
- What
- India faces a solar module capacity glut, with factories operating well below sustainable utilisation levels.
- Where
- India’s solar manufacturing industry is affected, while exports are particularly exposed to the United States market.
- When
- The assessment covers trends through FY26 and projects that the mismatch may persist through 2030.
- Why
- Manufacturing capacity has expanded faster than demand, while renewable-energy tenders and exports have weakened and additional capacity is still planned.
Key facts
- Current module capacity
- 233 GW
- Factory utilisation
- 35-40%, below the estimated 50-65% needed for sustainable operations
- Planned or under-construction capacity
- Approximately 135 GW
- FY26 renewable-energy tenders
- 24 GW, down about 47% from nearly 45 GW in FY25
- FY26 module exports
- Approximately 4.5 GW, with nearly 97% going to the United States
- Vulnerable capacity
- About 45-50 GW, largely involving small assemblers, older PERC lines and firms without upstream integration plans
- Potential additional annual demand by 2030
- Approximately 17-22 GW from data centres, green hydrogen and exports
Quotes
Prabhakar Sharma
Senior consultant at JMK Research
“India has added module capacity faster than the market can absorb it. With around 135GW more already planned or under construction and factories running at 35-40%, the pressure on utilisation, margins, and returns will only intensify. Standalone module manufacturers face a real risk of stranded assets.”
financialexpress.com
Sources
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