India’s Solar Cell Supplies To Trail Demand Till FY27, Finds Study

India has recently witnessed a surge in solar capacity additions, which is estimated to double to 30 GW in FY25, according to an SBI Caps report. This increase in capacity additions is expected to continue improving in FY26 and FY27, further accelerating module demand. The rooftop solar sector is also anticipated to see significant growth, taking combined deployment to ~85-90 GW for FY26-FY27.

The rise in solar module demand is expected to reach maturity by FY27. The report suggests that integration could further drive the need to meet ALCM and DCR goals. It projects that 90 GW of ALMM module demand will likely be met by domestic production by FY27 (currently ~70 GW), with the remaining demand, mainly from C&I captive projects, relying on cheaper imports.

Despite projected  improvements in the integration factor (cell/module capacity ratio) from ~32% to ~65%, more than half of India’s solar cell requirements will still be imported by FY27, even if all promised capacities come online. The report attributes this to the rising costs of DCR modules, which will continue to command a premium due to demand from the PM-Surya Ghar Muft Bijli Yojana (PM-SGMBY) outpacing domestic cell capacity expansions and increasing regulatory requirements for DCR compliance.

The report also highlights that the growth in cell production must be accompanied by an expansion in wafer and ingot manufacturing, positioning it as the next strategic priority. The government is expected to allocate USD 1 billion in incentives to support domestic ecosystem development.

Expected Domestic Manufacturing Capacity by FY27 (GWdc)

According to the latest announcements, major module manufacturers have planned significant capacity expansions, potentially increasing current capacity from ~90-100 GW to ~150-160 GW by FY27. However, effective capacity is projected to remain at ~90-100 GW by FY27. The report also notes that solar cell production will continue to lag behind module manufacturing. Despite this, the integration factor (cell/module ratio) is expected to improve from ~32% to ~65%, with four major players achieving full integration.

Based on the shared data, 18 companies are projected ti see a spike in their manufacturing capacity. The report showed these companies are, Waaree Energies, ReNew Power, Rayzon Solar, Tata Power, Vikram Solar, Premier Energies, ANIL Saativk Solar, First Solar, Goldi Solar, Grew Energy, Renew Sys, Solex Energy, Jakson Engineers Jupiter Solar, Insolation Energy, Websol Energy, Shirdi Sai and Reliance Industries

Moreover, the major module makers have estimated an increase in their domestic manufacturing capacity BY FY27 (GWdc) is expected to take their nameplate capacity from the current ~90-100 GW to ~150-160 GW by FY27. The latter translates to
an effective capacity of ~90-100 GW BY FY 27. Whereas, the report noted an increase in cell capacities which is projected to lag. However, integration factor (ratio of cell/module capacities) is perceived to improve from ~32% to ~65%.