India’s Solar Boom Hits Module Glut, Upstream Gaps Persist: Report
•February 11, 2026
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Why It Matters
Closing the upstream gap is essential for sustaining India's renewable growth and reducing import reliance, while policy‑driven cell demand offers early movers a competitive edge.
Key Takeaways
- •Module capacity 144 GW, target 180 GW FY30.
- •Cell capacity only 23.4 GW, lagging upstream.
- •Installations 45‑50 GW, module output 60‑65 GW excess.
- •ALMM List‑II adds cells June 2026, boosting demand.
- •Consolidation likely as tariffs limit exports.
Pulse Analysis
India’s solar boom has been driven largely by aggressive module‑manufacturing expansion, propelling installed capacity to roughly 144 GW and positioning the country as a global photovoltaic leader. Yet the rapid scale‑up has outpaced the development of critical upstream components—cells, wafers, ingots and polysilicon—leaving the value chain imbalanced. With annual installations projected at 45‑50 GW, the sector now produces 60‑65 GW of modules, creating a surplus that pressures smaller, pure‑play manufacturers and raises the spectre of industry consolidation.
Policy interventions are reshaping this landscape. The upcoming ALMM List‑II, slated for June 2026, will require domestic cell content, effectively mandating a shift toward backward integration. Coupled with existing tariffs on imported modules, the framework incentivizes firms to invest in large‑scale cell facilities ahead of peers, potentially before FY28. This regulatory push not only promises to narrow the capacity gap—currently a 23.4 GW cell shortfall—but also offers a clearer demand signal for investors seeking to capitalize on India’s renewable energy ambitions.
For market participants, the strategic imperative is clear: prioritize upstream capability building or risk marginalisation as the sector matures. Companies that secure cell production capacity early will benefit from policy‑driven demand, improved supply chain resilience, and higher margins compared to module‑only players. Meanwhile, the oversupply environment may accelerate mergers and acquisitions, consolidating the market around firms with integrated value chains. Over the next decade, a more balanced photovoltaic ecosystem will underpin India’s goal of achieving 300 GW of solar capacity by 2030, reinforcing its position in the global clean‑energy transition.
India’s solar boom hits module glut, upstream gaps persist: Report
Source: ANI
Published: Feb 11, 2026 at 01:49 PM IST
Policy changes are expected to boost demand for locally made cells. Manufacturers preparing for this will gain an advantage. The focus moves from rapid expansion to deeper integration.
Amid rising oversupply in the solar module segment in India, the industry should shift its focus from rapid capacity addition to backward integration and manufacturing maturity, as upstream segments such as cells, wafers, ingots and polysilicon remain relatively underdeveloped, according to a report by Elara Securities.
The report noted that oversupply in modules is outstripping near‑term demand, pivoting India's solar module industry away from aggressive expansion towards strengthening the upstream value chain.
While module manufacturing has scaled up significantly, upstream segments continue to lag, creating structural imbalances within the ecosystem.
“Oversupply in module outstrips near term demand, pivoting India's solar module industry, from rapid capacity addition to backward integration and manufacturing maturity.”
India's solar manufacturing capacity has expanded rapidly in recent years. Module capacity has reached around 144 GW operational and is projected to touch approximately 180 GW by FY30. In comparison, cell capacity stands at around 23.4 GW, according to data cited from the Ministry of New and Renewable Energy (MNRE).
The report highlighted that annual solar installations in India may reach only 45‑50 GW, while module output stands at 60‑65 GW, resulting in a clear supply‑demand mismatch and overcapacity concerns in the module segment.
U.S. tariffs have further curbed exports, leading to excess supply being diverted into the domestic market. This has added pressure on smaller and pure‑play module manufacturers, increasing the likelihood of consolidation in the sector.
The report also pointed out that policy support could reshape the demand outlook for upstream segments. The ALMM List‑II, which will include cells from June 2026, along with mandates for domestic cells, is expected to spike demand for locally manufactured cells.
Manufacturers that build and stabilise large‑scale cell capacity ahead of peers, potentially before FY28, are likely to benefit from the policy push and improved demand visibility.
The report highlighted that while India's solar module capacity has surged, concerns around overcapacity and supply‑demand mismatch remain significant.
It stressed that the industry's next phase of growth should be driven by deeper integration across the value chain and strengthening of upstream manufacturing capabilities to ensure long‑term sustainability.
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