Shortage of India-made Solar Modules Hits Projects with DCR Mandate

The reimposition of ALMM has added to the demand for domestic cells and modules


India’s ambitious push for solar energy is facing a significant hurdle: a shortage of domestically produced solar modules.

Subsidy-supported residential rooftop solar projects are facing a shortage of locally-made solar cells. Even if available, timely supply is not guaranteed and comes at a premium. In some cases, owing to the shortage, installers have even resorted to using second-hand solar modules.

A West Bengal-headquartered solar company explained, “Due to the high prices of DCR modules, many installers have started using second-hand modules, labeling them with new warranties. These used modules are refurbished by manufacturers and are available at significantly lower prices.”

These practices are not only unethical but also risk impacting the project’s health in the long term.

Additionally, imported cells are cheaper, forcing domestic suppliers to keep up. An industry representative explained, “It was difficult to get DCR cells before. Then, we tied up with two companies, and the situation is currently under control. DCR Cells are available, but timely supply is the issue.”

The reimposition of ALMM has added to the demand for domestic cells and modules.

A leading player commented, “We received many customer inquiries, but module delivery to project sites will be delayed because of the high volume of orders. Many customers want large-format modules, but manufacturers are struggling to meet demand. They either charge very high prices or have already committed their production capacity to other developers.”

According to industry sources, there is demand for higher quality modules made with India-made cells in the U.S. as trade restrictions make it difficult to export modules with Chinese cells. If this market develops, the DCR modules will be in even more demand in the short term, potentially exacerbating the current shortage.

Domestic Modules Costlier

The cost competitiveness of domestic modules remains a significant challenge. While the Basic Customs Duty on imported modules has provided some protection to domestic manufacturers, developers still find imported modules cheaper and of better quality.

Balancing protectionist measures with the need for cost-effective solar solutions remains a challenge.

An industry insider gave a comparison. “Imported solar modules are selling for ₹13.50 (~$0.16) to ₹14.50 (~$0.17) per watt, but DCR modules are priced around ₹23 (~$0.27) per watt. This significant price difference raises questions about the competitiveness of DCR modules.”

This price disparity is exacerbated by the limited supply of DCR cells, which currently stand at around 3 GW annually, which is insufficient to meet the burgeoning demand.

High input costs for raw materials like silver and copper paste, which have surged by over 40%, have added to the woes of domestic manufacturers.

Despite these challenges, the industry sees significant opportunities. The government’s push for self-reliance, coupled with initiatives like the Production Linked Incentive program, is expected to substantially increase module and cell manufacturing capacity in the coming years.

Recently, MNRE developed an online portal to ensure the traceability of domestically manufactured solar photovoltaic (PV) cells and modules and to assist in the verification of Domestic Content Requirement (DCR) in solar PV modules deployed across the country.


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