Solar module cos flag cell shortage; makers say demand can be met this year

New Delhi: Some solar module makers and vendors have raised concerns over the availability and rising cost of solar cells following the implementation of compulsory local sourcing rules from June 1, saying there is a significant mismatch between module manufacturing capacity and domestic cell availability.

Industry representatives met officials from the renewable energy ministry both before and after the implementation of the second Approved List of Models & Manufacturers (ALMM) to discuss their concerns. The primary issue among some non-integrated module and ancillary equipment makers-those who do not manufacture their own solar cells-is that while India has around 225 GW of nameplate module manufacturing capacity, and around 193 GW in ALMM-I, only about 30 GW of solar cell capacity is currently available domestically.

From current capacity of cells, not all are the higher efficiency ones, which are the most used, the Rajasthan Solar Association said.

Manufacturers of solar cells, however, say there is no shortage of supply relative to current demand and additional capacities scheduled to come online progressively by December will be sufficient to meet requirements. They also said that demand from projects requiring domestic content can be adequately met in calendar year 2026.

"There is an overcapacity in solar modules as the annual requirement is only around 50 GW," a solar cell manufacturer said.

The renewable energy ministry did not give a blanket extension of the deadline on requests of these representatives but had allowed exceptions for projects on certain conditions.

They had stated that the decisions reflected commitment towards policy stability in the solar manufacturing ecosystem and self-sufficiency in the segment.

The Indian Solar Manufacturers Association has projected that demand for domestically manufactured cells would not exceed 22-25 GW in calendar 2026. The association expects cell manufacturing capacity to rise to nearly 103 GW by December.

Of the projected 103 GW capacity by year-end, about 50 GW is already under active construction.

From June 1, solar project developers are required to use modules manufactured with domestically produced solar cells, except for projects exempted by the government, including certain net-metering, open access and renewable energy projects granted relief on a case-by-case basis.

The government has also said earlier that sufficient cell manufacturing capacity is likely to be operational by December for projects.

The smaller-capacity module makers, however, argue that the currently listed 30 GW capacity is unlikely to operate at full utilisation over the next 10 months, with actual output estimated at only 12-15 GW. This could result in a supply deficit of 8-10 GW until additional capacities become operational, according to a person aware of the discussions.

According to the Rajasthan Solar Association, which represents some of the concerned companies, the mismatch between module and cell manufacturing capacities could force some module manufacturers and ancillary equipment suppliers to curtail operations.

The association has also cautioned that delays and cost pressures arising from cell shortages could increase financial stress on certain projects and raise the risk of assets turning non-performing.