India’s Solar Equipment Manufacturing Set For Rs 1 Lakh Crore Investment Surge: CareEdge – EQ
In Short : India’s solar equipment manufacturing sector is set for a ₹1 lakh crore investment surge over the next two to three years, driven by growth in polysilicon and wafer capacities. With 155 GW of renewable energy capacity, including 91 GW from solar, India aims to surpass 35 GW of annual installations, boosting solar equipment demand and supporting its renewable energy goals.
In Detail : New Delhi – India’s solar equipment manufacturing sector is preparing for substantial growth over the next two to three years, with projected capital expenditure approaching Rs 1 lakh crore, according to a new report from CareEdge Ratings.
The expansion is expected to draw approximately Rs 70,000 crore in debt funding, encompassing investments in polysilicon and wafer capacities, the rating agency revealed in its Thursday assessment.
The nation’s renewable energy capacity reached 155 Gigawatt as of September 2024, with solar power emerging as the dominant contributor at 91 GW, following remarkable capacity additions over the previous seven to eight years.
This expanding renewable energy footprint stems from robust policy initiatives, enhanced tariff competitiveness, and strong investor engagement.
Following the installation of 18.5 GW of renewable energy capacity in 2023-24, CareEdge Ratings projects annual installations to exceed 35 GW in the coming two years, supported by a robust pipeline exceeding 100 GW.
The medium-term solar capacity growth will be driven by an annual tendering target of 50 GW renewable energy capacity through implementing agencies, with solar expected to constitute the majority share.
The government has implemented protective measures for domestic manufacturers, including a Basic Customs Duty of 25 percent on cells and 40 percent on modules from China, effective since April 2022.
This policy aims to shield domestic producers from competitive pricing while enhancing their market position. Additionally, projections indicate that rooftop solar, hybrid components, and off-grid solar will contribute approximately 20 GW of capacity additions over the next few years.
CareEdge Ratings Director Jatin Arya notes that while the sector benefits from strong domestic demand, export opportunities, and supportive policies, it faces several challenges.
These include insufficient integrated solar equipment capacity, continued dependence on Chinese supply chains, rising competition, and potential delays in renewable energy capacity additions due to systemic issues.
This expansion aligns with India’s broader environmental commitments made at COP26 in 2021, including ambitious targets to achieve 500 GW of non-fossil electricity capacity and generate half of its energy requirements from renewables by 2030.
The nation has also pledged to reduce emissions by 1 billion tonnes and decrease emissions intensity of GDP by 45 percent by 2030, culminating in a net-zero emissions target by 2070.
The push for renewable energy expansion reflects not only India’s domestic priorities but also aligns with global efforts toward climate change mitigation, as the country seeks to reduce its traditional reliance on fossil fuels for energy generation.
