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India’s Solar Module Boom Risks Overcapacity and Stranded Assets
India has built many factories that make solar panels.
These factories can make far more panels than India currently needs.
The factories are operating at only about 35–40% of their potential.
More factories are also planned, which could make the problem larger.
New projects such as data centres and green hydrogen may create additional demand.
India has also relied heavily on the United States to buy its exported panels.
New US duties have made those exports much harder.
The European Union could become another important market.
The report says India should make more parts domestically and use its factories more efficiently.
India’s module capacity is nearly seven times its cell capacity and 116 times its ingot-wafer capacity.
About 135GW of additional module capacity is planned or under construction, while factories operate at roughly 35–40%.
New demand from data centres, green hydrogen, ammonia, and exports could add 17–22GW by 2030, but may not absorb all planned capacity.
The United States took about 97% of India’s module export volume in FY2026, but duties exceeding 200% have disrupted that trade.
The report recommends upstream investment, broader export markets, faster transmission approvals, and support for repowering ageing solar assets.
- Who
- Indian solar module manufacturers, policymakers, exporters, and analysts from JMK Research and the Institute for Energy Economics and Financial Analysis are involved in the assessment.
- What
- India has developed substantial solar module overcapacity while upstream production of cells, wafers, and polysilicon remains underdeveloped and dependent on imports.
- Where
- The issue concerns India’s solar manufacturing sector, with export implications involving the United States and European Union.
- When
- The report assesses the outlook through 2030 and cites export data for FY2024 and FY2026.
- Why
- Module capacity has expanded faster than demand, while high US duties and dependence on imported inputs create pressure on utilisation, margins, returns, and smaller manufacturers.
Overcapacity Concerns
Growth and Transition Opportunity
Capacity versus demand
Overcapacity Concerns
India has added module capacity faster than the market can absorb it, threatening utilisation, margins, returns, and the viability of standalone manufacturers.
Growth and Transition Opportunity
Solar deployment is expected to grow strongly, and demand from data centres, green hydrogen and ammonia, and exports could help absorb part of the excess.
Export strategy
Overcapacity Concerns
India’s export base is highly concentrated in the United States, where duties exceeding 200% have disrupted shipments and reduced exports from their FY2024 peak.
Growth and Transition Opportunity
The European Union offers a more structured medium-term alternative, and broader export markets could provide an important outlet for Indian manufacturers.
Industry outlook
Overcapacity Concerns
Smaller, non-integrated manufacturers are likely to face increasing pressure as the gap between supply and demand reshapes the sector.
Growth and Transition Opportunity
The report describes overcapacity as a transitional feature that could be addressed through consolidation, upstream investment, stronger domestic demand, and improved transmission infrastructure.
Key facts
- Module-to-cell capacity ratio
- India’s module capacity is nearly seven times its cell capacity.
- Module-to-ingot-wafer capacity ratio
- Module capacity is 116 times ingot-wafer capacity.
- Additional planned capacity
- Around 135GW is already planned or under construction.
- Factory utilisation
- Factories are operating at approximately 35–40%.
- Potential additional demand by 2030
- Data centres, green hydrogen and ammonia, and exports could provide an incremental 17–22GW.
- US export exposure
- The United States absorbed around 97% of India’s module export volume in FY2026.
- US duties and export decline
- Combined US duties exceeding 200% have contributed to a 44–47% decline in exports from the FY2024 peak.
Quotes
Prabhakar Sharma
Senior Consultant at JMK Research and lead author of the report
“The challenge is no longer building capacity; it is using it well and deepening the value chain. That means spreading incentives evenly across cells, wafers, and polysilicon rather than rewarding modules alone, strengthening industry-research collaboration, and giving exporters targeted, time-bound support.”
businesstoday.in
“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.”
businesstoday.in
Sources
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