Indian solar PV exports surged over 23 times from FY2022 to FY2024, driven primarily by demand from the U.S., which accounted for 97 percent of exports. However, this focus may strain India’s domestic supply, affecting renewable energy goals. IEEFA research recommends balancing export and local markets to sustain India’s renewable energy momentum.
November 11, 2024. By EI News Network
In a significant milestone for India’s renewable energy sector, solar photovoltaic (PV) module exports have surged over 23-fold from Fiscal Year (FY) 2022 to FY2024, according to the latest report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics, titled ‘Indian Solar PV Exports Surging’.
As per the report, this surge in exports—primarily to the United States—highlights India’s transition from a net importer to a major global supplier of PV products. Indian PV module manufacturers exported roughly USD 2 billion worth of modules in FY2024, marking a dramatic shift and strengthening India’s position as a reliable alternative to Chinese suppliers.
The US accounted for over 97 percent of India’s PV module exports in FY2023 and FY2024, a trend likely to continue given India’s favourable trade position and geopolitical shifts. As the US gradually phases out Chinese imports, it is anticipated that India will benefit from the ongoing antidumping and countervailing duty (AD/CVD) investigation into PV products from Southeast Asian (SEA) countries, which currently supply over 75 percent of the US market.
“If SEA countries such as Vietnam, Malaysia, Thailand, and Cambodia face import tariffs similar to those on Chinese imports, India could emerge as the leading PV exporter to the US,” says the report. This outlook is further buoyed by delays in the US PV manufacturing capacities under the Inflation Reduction Act (IRA), creating an opportunity for India to step in and meet the rising demand.
The rapid growth in exports, however, presents challenges for the domestic market. After fulfilling export orders, Indian PV manufacturers are expected to have only about 21–25 GW of capacity available for domestic consumption over the next two years. This falls short of the estimated 30 GW per annum required for India to meet its renewable energy targets for 2030.
The report pointed out that domestic sectors, especially the price-sensitive residential rooftop solar market, may face supply shortages due to the smaller order sizes typical in distributed renewable energy segments. “Indian manufacturers are increasingly prioritising exports due to significantly higher profit margins in developed markets. The sales of PV modules to the US and other developed countries can yield 40–60 percent higher profit margins despite increased logistics expenses.,” points out the report.
This potential has led major manufacturers—including Waaree Energies, Adani Solar, and Vikram Solar—to shift focus toward international sales, with each exporting more than half of their annual production in FY2024.
Moreover, other Indian companies such as Grew Energy, ReNew Power, Navitas, Solex Energy, and Saatvik Energy are also capitalising on this export demand and setting up supply chains abroad. To further solidify their position in the U.S. market, Waaree and Vikram Solar have announced plans to establish manufacturing facilities in the U.S. to capitalise on IRA incentives, ensuring sustained access to the U.S. market and building long-term trade relationships.
The report also mentions suggestions from industry experts for a multi-pronged approach to maximise India’s PV export potential while balancing domestic needs, as it says, “First, India must continue leveraging its advantageous position in the U.S. market, one of the world’s largest solar markets in terms of installations and technology adoption. By scaling exports, Indian PV manufacturers can achieve economies of scale, enhancing product quality and competitiveness on a global scale.”
Further, it adds, “To maintain growth, experts also recommend upstream backward integration, allowing Indian manufacturers to secure their supply chains, reduce costs, and tap into new markets in Europe, Africa, and Latin America. Furthermore, manufacturers are urged to balance their exports with sufficient domestic supply, particularly for segments with smaller order sizes like residential rooftop solar.”
The report points out further, “This balance will be crucial to avoid disruptions in India’s domestic renewable energy transition and maintain stable solar module prices. India’s recent progress in PV exports underscores the nation’s potential as a leading player in the global PV market. With the right mix of domestic and export strategies, India is positioned to establish itself as a central hub for PV manufacturing, supporting not only its renewable energy goals but also the world’s transition to cleaner energy sources.”
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