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					</table>India&#8217;s solar inverter industry faces significant challenges in increasing domestic content because of its dependence on imported power electronic components, particularly semiconductors. Industry executives say this could complicate the introduction of domestic sourcing requirements under a proposed Approved List of Models and Manufacturers (ALMM) framework for inverters.
While greater localization could reduce import dependence and some supply chain risks, stringent domestic content requirements could increase inverter prices unless local component manufacturing becomes cost-competitive.
Industry executives believe a phased localization framework could support domestic manufacturing over time, but achieving high domestic content levels would require substantial investment in components, technology, and research and development.
In 2025, inverter shipments to solar projects in India increased 40.8% compared to 2024, driven by record installations and a strong project pipeline targeted for commissioning in the first half of 2026, according to Mercom&#8217;s <a href="https://www.mercomindia.com/solar-inverter-suppliers-leading-indias-market-in-2025" target="_blank" rel="noopener">Solar Market Leaderboard 2026 report</a>.
Limited Scope for Localization
Industry executives say domestic content requirements could encourage local manufacturing, but near-term localization is constrained by dependence on imported electronic components, which they estimate account for approximately 80% of an inverter&#8217;s value.
Bharat Singh, Director-Sales &amp; Marketing at <a href="https://www.deyeinverter.com/" target="_blank" rel="noopener">Ningbo Deye New Energy</a>, said domestic content of approximately 20%–30% is achievable through locally manufactured heat sinks, cabinets, enclosures, and assembly-related inputs. Printed circuit board (PCB) assembly can also be localized.
However, critical components such as semiconductors, insulated-gate bipolar transistors (IGBTs), chips, relays, and capacitors remain largely import-dependent.
Singh warned that achieving 50% domestic content would be difficult without a stronger semiconductor manufacturing ecosystem. He called for government incentives to improve semiconductor availability, particularly as inverter manufacturers compete with other industries, including data centers, for electronic components.
Unlike solar modules, which rely heavily on materials and assembly processes, inverters require sophisticated power electronics, control systems, and software. This makes component localization more complex.
Raman Bhatia, Managing Director at <a href="https://www.servotech.in/" target="_blank" rel="noopener">Servotech Renewable</a>, highlighted that many of the semiconductors, IGBTs, capacitors, and other components used in inverters are not manufactured domestically at a meaningful scale.
He estimated that near-complete localization could take three to four years.
Harendra Tomar, Leader-Business Development at <a href="https://www.sungrowpower.com/en" target="_blank" rel="noopener">Sungrow</a>, favored a phased implementation, beginning with 15%–20% domestic content and gradually increasing it to 30% and 40%.
Haygreev Upadhyay, Sales Head at <a href="https://gb.solar/" target="_blank" rel="noopener">GB Solar,</a> noted localization could reach 50% within a year, although complete localization would take longer.
Cost Impact
Higher domestic component costs could be another barrier to inverter localization. Industry executives say locally manufactured enclosures and heat sinks can be significantly more expensive than comparable Chinese products.
According to Mercom&#8217;s <a href="https://www.mercomindia.com/research/mercom-view" target="_blank" rel="noopener">Price Tracker</a>, the average inverter price was ₹1.61 million(~$16,909)/MW <img loading="lazy" decoding="async" class="alignnone size-full wp-image-96679" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/06/icon-3-2-e1781760279241.png" alt="market-tracker-icon" width="20" height="16" /> in Q2 2026.
Tomar estimated a price difference of approximately 20% between localized and imported products.  He noted that domestic inverter prices had also increased by 10%-15% over the past three to four months due to geopolitical uncertainty, higher transportation and insurance costs, and rupee-dollar fluctuations.
Such price differences could influence procurement decisions by engineering, procurement, and construction (EPC) companies and project developers, particularly in price-sensitive solar projects.
Tomar also highlighted the challenges of serving separate markets with different domestic content requirements. Manufacturers supplying both projects subject to localization mandates and the broader private market may need to maintain different product configurations, increasing operational complexity and costs.
Separately, data localization and communication requirements are adding compliance costs for inverter suppliers under the PM Surya Ghar: Muft Bijli Yojana.
In August, the Ministry of New and Renewable Energy <a href="https://www.mercomindia.com/mnre-mandates-storing-inverter-data-of-pm-surya-ghar-projects-in-india" target="_blank" rel="noopener">directed</a> inverter manufacturers supplying to rooftop solar systems under the PM Surya Ghar to ensure that inverter-level data are stored in India and that associated monitoring and control servers are located within the country.
According to Singh, Deye has established domestic servers in Mumbai and Hyderabad, investing about ₹20 million (~$210,049) and annual maintenance costs of ₹1.2 million (~$12,603) per server.
He added that additional SIM-based communication requirements could increase costs by ₹1,200 (~$12.60)-₹1,500 (~$15.75) per inverter, excluding recurring communication expenses.
Manufacturers may pass some of these additional costs on to customers, although higher production volumes and economies of scale could improve domestic manufacturing competitiveness over time.
Tomar emphasized the need for phased implementation of data localization requirements, with clear rules governing communication protocols, domestic server or cloud infrastructure, and integration with government portals.
R&amp;D Challenges
Industry executives identified power semiconductors, IGBTs, metal-oxide-semiconductor field-effect transistors (MOSFETs), and wide bandgap devices as priority areas for domestic R&amp;D, given their importance to inverter efficiency, thermal performance, and reliability.
Bhatia said domestic component development also faces lengthy qualification processes including reliability and thermal cycling tests, which limit the scope for quickly replacing imported components.
Firmware, control algorithms, PCB design, and communication systems offer more immediate opportunities for domestic development.
Technology transfers, partnerships with international manufacturers, and collaborations with technical institutions could help build these capabilities.
However, deeper localization will depend on developing a competitive domestic supply chain for critical electronic components, particularly power semiconductors, while ensuring that locally manufactured inverters meet performance, reliability, and cost requirements.

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