India Mandates Locally Made Solar Cells for Government Projects from 2026 to Boost Domestic Manufacturing

India’s renewable energy ministry has announced that from June 2026, government-backed clean energy projects will only be allowed to use solar cells manufactured locally by companies on an approved list. This move aligns with the country's broader strategy to reduce reliance on Chinese imports and foster domestic manufacturing in the solar energy sector.

Strengthening India's Solar Supply Chain

Currently, India mandates the use of locally made photovoltaic (PV) modules for government projects. The extension of this rule to include solar cells highlights a significant policy shift aimed at addressing a gap in India's solar manufacturing ecosystem.

Key Highlights of the Policy Change

Domestic Manufacturing Push

• The decision supports India's goal to enhance self-reliance in clean energy.

• Domestic production of solar PV cells, which currently lags at just over 7 GW capacity, is expected to increase significantly.

  
  

Scaling Capacity

• India’s current solar PV module capacity stands at approximately 80 GW, while cell manufacturing is catching up.

• Upcoming expansions include:

  • Tata Power: A newly commissioned 4.3 GW solar cell plant in southern India.

  • Reliance Industries: A 20 GW integrated solar cell and module facility in Gujarat, with its first phase set to commence operations this year.

  • Adani Group: A 4 GW cell and module production unit in Gujarat.

    
    

Future Outlook

• A list of approved domestic manufacturers will be issued next year as solar cell capacity grows.

• Companies like Waaree Energies, Vikram Solar, and Solex Energy are actively expanding their cell-making pipelines.

  
  

Challenges Ahead

Price Competitiveness

Domestic solar cells may be costlier than imported alternatives. Experts, including Vikram V, Vice President of Corporate Ratings at ICRA, emphasize the need for:

• Scaling up cell capacity,

• Improving manufacturing efficiency, and

• Achieving cost competitiveness to prevent price escalation in solar projects.

  
  

Market Transition

India's reliance on Chinese cells remains significant, requiring sustained investment and innovation to bridge the gap.

India’s Clean Energy Ambitions

The policy aligns with India’s commitment to increasing its non-fossil fuel energy capacity to 500 GW by 2030, up from about 156 GW today. By bolstering the domestic solar manufacturing sector, India aims to:

• Strengthen energy security

• Reduce dependence on imports, and

• Enhance its global position as a renewable energy leader.