India Strives to Become Global Second-Largest Solar Module Producer by 2025, According to ET EnergyWorld

According to a Wood Mackenzie report, India is poised to become the second-largest producer of solar modules by 2025, surpassing Southeast Asia. The majority of production is expected to cater to US demand for solar modules. However, India faces challenges due to high production costs caused by a 25% basic customs duty on imported solar cells. There is speculation that the Indian government might lower the duty on Chinese modules to support export ambitions, as Chinese modules currently have a 40% tax.

Meanwhile, China is predicted to hold over 80% of the global capacity for the solar module supply chain from 2024. Despite this dominance, China also faces challenges in N-type cell technology, which accounts for only 5% of announced global expansions in this area. This suggests that vertically integrated manufacturers may still find opportunities for growth despite tightened profit margins in the sector.

The US is developing its own photovoltaic manufacturing capabilities under the Inflation Reduction Act but remains dependent on imports due to the absence of domestic production of wafers, cells, or glass. This dependency is expected to continue, especially once President Biden’s temporary waiver on solar import tariffs expires in mid-2024. Europe has also imposed protective tariffs on Chinese modules due to non-competitive prices.

Southeast Asia’s solar capacity is mainly driven by Chinese investments, underscoring the changing dynamics of the global solar module supply chain. As countries look towards more sustainable energy solutions and increased reliance on renewable energy sources such as solar power, we can expect further shifts and changes in this industry in the coming years.