(Photo : PIB)

• India's solar product exports have surged to $2 billion, marking a shift from net importer to net exporter.
• The US has emerged as a key market for Indian solar PV exports, accounting for over 97% of them.
• Indian PV manufacturers need to balance export market needs with domestic availability to avoid supply shortages.
• To sustain growth and meet renewable energy targets, India must balance its export-oriented approach with domestic demand and explore untapped markets.

India's solar photovoltaic (PV) product exports have witnessed a significant surge, recording a 23-fold increase to $2 billion in the fiscal year 2024 from FY22. This remarkable leap, as reported by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics, marks a pivotal shift in India's solar industry, transitioning from a net importer to a net exporter of solar products.

The report attributes this surge to several factors. One of the key reasons is the adoption of India as a viable alternative in the China Plus One strategy by other countries. This strategy refers to the diversification approach adopted by companies to avoid over-reliance on China and mitigate supply chain risks. Another contributing factor is the efforts of domestic PV manufacturers to sell their products at a higher premium abroad.

US Emerges as Key Market for Indian Solar PV Exports

The United States has emerged as a key market for Indian solar PV exports. More than 97% of Indian solar PV exports were directed to the US in both FY2023 and FY2024. The report suggests that focusing on the US market can significantly benefit the Indian PV manufacturing ecosystem. Exposure to the US market will enable Indian PV manufacturers to attain economies of scale, thereby enhancing their product quality and competitiveness.

However, to establish India as a global manufacturing hub in the long run, Indian PV manufacturers must focus on upstream backward integration. This strategy will help India maintain its foothold in existing markets while unlocking untapped markets like Europe, Africa, Latin America, etc.

Balancing Export Market Needs with Domestic Availability

The report also emphasizes the need for PV manufacturers in India to balance the needs of the growing export market with domestic availability. During periods of domestic supply shortage, certain distributed renewable energy segments, such as residential rooftop solar, could be affected due to their smaller order sizes. This can make it difficult for developers to secure enough supplies to execute their projects. The supply-demand gap also affects solar module prices, which is a critical factor for the price-sensitive residential rooftop solar segment.

The report estimates that annual module production by Indian solar PV manufacturers in FY2025 and FY2026 will likely be 28 gigawatts (GW) and 35GW, respectively. However, after accounting for exports, the resultant supply by Indian PV manufacturers in the next two years will be only 21GW and 25GW, respectively. This is less than the requirement of approximately 30GW per annum to meet India's 2030 renewable energy target.