India Faces $30 Billion Annual Bill for Imported Solar Panels by 2030, Warns Think Tank

India could pay up to $30 billion annually for imported solar panels by 2030 if it fails to build a local supply chain, warns GTRI.

India may find itself paying as much as $30 billion annually for imported solar panels if it aims to meet its ambitious target of 500 GW of solar and wind energy capacity by 2030, according to the Global Trade Research Initiative (GTRI). The local think tank highlights a critical challenge in India’s renewable energy ambitions: heavy dependence on imports, especially from China.

Heavy Reliance on Imports for Solar Components

Currently, India is heavily reliant on imports for its solar energy sector, despite some domestic manufacturing capabilities. GTRI estimates that 90% of the country's solar manufacturing is concentrated in the final stages of production—primarily assembling imported solar cells into modules. Local production contributes only 15% to the overall value addition.

Ajay Srivastava, the founder of GTRI, explained that developing a self-sustaining solar supply chain within India would require significant investment, particularly in the production of polysilicon and wafers—key components in solar panels.

Slow Progress Toward the 2030 Target

India’s solar and wind installations have grown, but not at the pace required to achieve the 2030 target. The country installed 15 GW of solar capacity in fiscal 2023-24, bringing the national total to 90.8 GW by September. While this represents considerable growth from just 2.8 GW of newly installed capacity in 2014, it falls far short of the 65-70 GW annual additions needed to meet the 2030 goal.

According to GTRI, 80% of India’s new capacity will need to come from solar power to stay on track for its renewable energy targets. The think tank warns that India’s current reliance on imports—62.6% of which come from China—could push solar import costs to $30 billion annually if the domestic supply chain is not strengthened.

Building a Local Supply Chain: A Major Hurdle

While India has made strides in boosting solar energy production, the country faces a massive challenge in building an independent solar components supply chain. "Local production is import-dependent and mainly focuses on the final two stages," Srivastava pointed out. To mitigate the risk of deepening dependence on China, India will need substantial investment in upstream solar manufacturing, particularly in the production of polysilicon and wafers.

With only six years left to meet its 2030 target, India must ramp up domestic solar production to avoid both financial strain from rising import costs and reliance on foreign suppliers.