Why in News?
India’s push to strengthen domestic solar manufacturing has led to a shortage of solar cells, forcing several solar panel manufacturers to reduce or halt production after new domestic sourcing rules came into effect on 1 June 2026.
What is the Issue?
- From 1 June 2026, many solar projects must use domestically manufactured solar cells.
- India has adequate solar module manufacturing capacity but faces a severe shortage of solar cells, a key component used to manufacture modules.
- Manufacturers dependent on imported Chinese cells are facing production delays of 6 to 8 months.
Why is India Facing a Cell Shortage?
- India imports nearly 95% of its solar cells from China.
- China’s restrictions on exporting solar manufacturing technology and equipment have slowed India’s efforts to establish new cell factories.
- Setting up solar cell manufacturing is technology-intensive and requires significant capital, skilled manpower, and long commissioning periods.
Impact
- Around one-third of India’s small and medium solar module manufacturers have temporarily halted production.
- Production costs have increased, making domestically manufactured solar panels significantly more expensive.
- The shortage could:
- Delay renewable energy projects.
- Increase dependence on coal-based power.
- Threaten employment and investments.
- Slow progress towards India’s clean energy targets.
India’s Solar Manufacturing Capacity
- Solar module manufacturing capacity: ~200 GW
- Solar cell manufacturing capacity: ~27 GW (effective operational capacity only 16-18 GW)
- Solar cell imports (2025-26): About 95% sourced from China.
- Import value: Around US$1.86 billion, up 37% over the previous year.
India’s Renewable Energy Targets
- 500 GW of non-fossil fuel installed capacity by 2030.
- Current non-fossil fuel capacity: 288 GW.
- Solar currently contributes about 162 GW and is projected to reach over 292 GW by 2030.
Prelims Value Added
- Solar Cell: Converts sunlight directly into electricity using the photovoltaic effect.
- Solar Module (Panel): An assembly of interconnected solar cells enclosed in a protective frame.
- Multiple modules connected together form a solar array.
[2018] With reference to solar power production in India, consider the following statements :
1. India is the third largest in the world in the manufacture of silicon wafers used in photovoltaic units.
2. The solar power tariffs are determined by the Solar Energy Corporation of India.
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