EXCLUSIVE: Why Solar Manufacturers Are Heading To Odisha?

Why Solar Manufacturers Are Heading To Odisha?

India’s solar manufacturing sector is undergoing a once-in-a-generation transition. From a token few GWs of domestic module capacity and less than a GW of cell-making capacity a decade back, the sector is remaking itself. There are over 100 domestic solar module manufacturing companies with a capacity of over 120 GW today, and more to come. Domestic Cell making has crossed the 25 GW mark, and could be at 50 GW by this time next year. Even ingots and wafer production have started at a small scale, and are slated to be over 15 GW by 2027-28. Finally, polysilicon, where it all starts, will also make its manufacturing debut in the country at some stage over the next 24 months.

The progress made, and the massive expansions planned, have seen solar manufacturing recognised for the large opportunity it is by many states, and that is finally seeing production plans expand beyond the established states like Gujarat, Rajasthan, Tamil Nadu, or Maharashtra etc.

Key policy moves, like the Approved List of Cell Manufacturers (ALCM), slated to kick in from June next year, to plans further ahead for similar initiatives in wafers and ingots, provide a strong opportunity for states to capture the solar supply chain opportunities opening up.

While the biggest opportunity until now was the rush into module manufacturing driven by the ALMM requirement, the shift to cell making and further backward integrations is actually a bigger opportunity in terms of capital investments. Thus, while Gujarat, the early mover in this manufacturing wave that started post-pandemic in 2020-21, has grabbed the majority of the module manufacturing investment, all is not lost for other states. When it comes to solar cells, ingots and wafers, the choices of the new age manufacturers are changing. This is where the coastal state of Odisha has surprised many by emerging as a state of choice for solar cell, ingot, and wafer manufacturing by many manufacturers.

You only need to read the IPO plans of listed or soon-to-be-listed solar companies that have announced plans to make the state their base for their proposed solar cell, ingots and wafer plants.

Till now, around 15 companies have publicly announced their plans to establish solar manufacturing in Odisha, with the likelihood that positive feedback from them will encourage more to follow.

India’s largest cell and module maker, Waaree Energies, in its IPO prospectus in 2024, promised an integrated 6 GW solar manufacturing setup in Dhenkanal. While the firm seems to have tweaked those plans recently with some manufacturing plans for Gujarat and Maharashtra as well, it has reiterated that its Odisha plans remain.

More recently, the Odisha government also announced allocating a land parcel to Inox Solar for setting up their proposed solar cell and solar module plant in Dhenkanal district of the state as well. Inox being the latest in a list of firms to have announced plans for making in the state. If all the 15 firms stick to their original plan, the state will soon host solar cell manufacturing units with a cumulative capacity of 35.95 GW and solar module manufacturing units with a capacity of around 30 GW.

An array of firms 

List of Solar Manufacturers Planning Projects In Odisha.

Take Ambala-based module maker Saatvik Green, which has already submitted its Draft Red Herring Prospectus (DRHP) with the Security Exchange Board of India (SEBI), proposing to start solar module manufacturing from Gopalpur in the Ganjam district of Odisha.

For these firms, the state’s favourable geographical location, connectivity and several government support incentives for green equipment manufacturing have played a key role in the decision to consider the state seriously.

The Fine Print Of Odisha Advantage 

There are primarily three state policies that are responsible for fueling the green energy investments in the state. One is the Renewable Energy Policy of Odisha (2022), Industrial Resolution Policy 2022 and the Special Economic Zone (SEZ) Policy-2015. The SEZ Policy specifically talks about the benefits of SEZs in the state, like the Gopalpur SEZ, among others, while the Renewable Energy Policy talks about the state’s plan to boost green energy equipment manufacturing in the state.

But the key policy that talks about the whole gamut of incentives to be granted for solar manufacturers is the state government’s Industrial Policy Resolution (IPR) of 2022. The policy recognizes “green equipment manufacturing” in the ‘thrust sector”, the second sector, given priority by the Odisha Industries department. This policy has also not been disturbed by the new state BJP government that took charge in 2024.

Hemant Sharma

“We have crafted one of the finest policy-IPR 2022 to attract investment in the solar manufacturing sector. We have earmarked three key zones-Gopalpur SEZ, Angul-Dhenkanal region and Khurda for solar manufacturers. We also did our market research earlier on the issue and reached out to the leading solar manufacturers and offer key incentives which is highly preferrable for the sector. Gopalpur SEZ is one of the key regions in the country which can allow several solar manufacturers to invest. Facilities like no import and export duty for the firms investing here and the plug-and-play facility for them proved vital. Talks are still on with other players and we are hopeful of many more solar manufacturers confirming their investment in the state soon,” Hemant Sharma, Additional Chief Secretary, Odisha Industries Department, told Saur Energy.

Several companies like Waaree Energies and Saatvik Solar have also mentioned the benefits these firms can take from the Industrial Policy Resolution for their solar manufacturing plans.

Odisha is offering a 30 percent capital subsidy on actual investment in plant and machinery—excluding land and building costs—to attract solar equipment manufacturers under its latest policy push.

The state has also announced a full exemption from electricity duty for a period of seven to ten years, significantly lowering operational costs in a business where power costs are significant. In addition, it offers a 100 percent exemption on stamp duty for land acquisition and deed registration, easing initial capital expenditure for new entrants.

To further improve project viability, Odisha is offering up to 100 percent reimbursement of state GST. Manufacturers will also benefit from a power tariff reimbursement at the rate of Rs 2 per unit. That comes along with a much more dependable power situation in the state where all four discoms are a public-private partnership between the state government and the Tata Power group.

In a bid to streamline land access, the state has made land parcels available on lease through its dedicated Land Bank Facility.

Shakti Dubey

Interestingly, the state supports job creation through 100% reimbursement of the employer’s contribution towards ESI and EPF for a duration of 7 years, encouraging companies to generate employment while reducing their statutory burden. Companies like Icon Solar is also exploring plans to setup a 2 GW of solar plant in Odisha, its Director Shakti Dubey told Saur Energy.

On why Odisha was chosen, Dubey explained, “We selected Odisha because the state government has developed a dedicated area in Gopalpur where all necessary approvals are already in place. They’re providing ready-to-use infrastructure with plug-and-play options. Beyond subsidies, what really stands out is the ease of doing business—single-window clearances and readily available land parcels make it an ideal choice for setting up solar cell manufacturing units.

List of incentives given by Odisha govt for solar manufacturers. Source: IPR 2022

He added that while power tariffs in Odisha aren’t the lowest in the country, the presence of skilled labor, fewer operational hurdles, and proximity to ports—located within 30 kilometers—significantly enhance the logistical efficiency of the project. “Having ports close by will streamline both our import and export activities,” Dubey said.

For understanding the geographical advantage the state enjoys, we need to first understand its geography. From the latest investment trends, we can see that most of the investments in the solar manufacturing areas are coming either for Gopalpur SEZ and adjoining areas, Khurda (close to Bhubaneswar-the state capital) or Dhenkanal.

Let’s break it up. Gopalpur SEZ, where the Saatvik Green solar cell manufacturing is planned on the sub-leased land from Tatas in the SEZ zone, is barely 12 kms from Gopalpur port. Gopalpur also lies in the Ganjam district of the state, the last district bordering Odisha and Andhra Pradesh. That is likely to aid in acquiring manpower at a more competitive cost compared to other states.

The strategic location of Gopalpur empowers the manufacturers to import and export items easily from Gopalpur (mainly from Southeast Asian countries) or rely on the two other major ports-Paradip Port in Odisha and Vizag Port in Andhra Pradesh. The region is also well connected with the state capital, Paradip Port and Vizag Port via national highways.

A map of Odisha with the key proposed solar manufacturing districts and their proximity to ports

Similarly, those firms that have earmarked Khurda can enjoy the proximity of Paradip Port and Gopalpur in their vicinity, while firms in Dhenkanal have Paradip Port as their nearest export and import hub to cut down costs. While Gopalpur Port and Paradip Port can help these firms to connect with Southeast Asian countries, the Vizag Port can enable them to connect not only with Southeast Asian countries but with the Middle East and Africa too.

Saatvik Green’s DRHP duly highlights these advantages  to justify their choice of destination for solar manufacturing.“Odisha provides a number of advantages for solar PV module manufacturing such as supportive government policies, skilled labour force, proximity to markets, infrastructure, favourable business environment etc. Such benefits make it an attractive location for setting up solar PV module manufacturing facilities.”

Road distance of proposed sites from key ports nearby. Source: Google Maps

It also added, “Additionally, Odisha has a number of ports which can be utilised for efficient logistics, reducing shipping costs and delivery times. Module manufacturers can also explore opportunities for exporting solar PV modules to international markets, making them competitive on the global stage. Odisha is also well connected logistically to the entire southeast India to cover the domestic market.”

During an interaction with Saur Energy, Amit Paithankar, CEO of Waaree Energies, had praised Odisha for the capital subsidy that the state has been bestowing to the solar manufacturers in the state.

Challenges for Odisha 

The recent flutter that was created by Waaree’s exchange filing of some ‘realignment’ of resources outside Odisha, hints at some of the practical challenges the company could face in the state when it comes to ground-level executions. And with profits and timely completion in mind, Waaree is not alone. Even Premier Energies also moved out of Telangana and chose Andhra Pradesh for its proposed solar cell plant to ensure the timely execution of the project, despite being based in the Telangana state capital, Hyderabad.

The lack of local support, any likely local conflicts, dilly-dallying by external outsourced agencies in the region or other logistics issues could yet prove to be a deterrent for the growth of solar manufacturing plans in the state.

Solar cell manufacturing or further backward integration is a painstaking exercise for manufacturers as it does allow a number of approvals ranging from water, waste management to many (around 14-16 approvals), compared to the much fewer approvals needed for solar module manufacturing, which is closer to assembling by most accounts. For a state bureaucracy that is still coming to terms with opportunities in manufacturing in new sectors beyond the commodities and metals it has been known for, this could prove to be a challenge, despite favourable policies.

Conclusion

The hard task of changing mindsets, of convincing manufacturers to consider the state and even commit to it has been done by the state government/s, both present and past. It will now fall on the new government to ensure that momentum is not lost, and solar does deliver the kind of opportunities and benefits that it can. For a state that has always had a special place for the sun and hosts the largest Sun temple in the country, it would be the perfect homecoming too.