India sees a future making solar panels for itself, and maybe the world

Time of India

06-05-2025

China, the world's clean-energy juggernaut, faces a rival next door. And one of its top customers, no less.
India, a big buyer of Chinese solar panels and electric vehicle batteries, is using a raft of government incentives to make more green gear at home. It is driven not just by the need to satisfy the galloping energy demands of its 1.4 billion people, but also to cash in on other countries that want to China-proof their energy supply chains, not least the United States.
India remains a tiny and tardy entrant. Last year, it produced about 80 gigawatts of solar modules, while China produced more than 10 times that. India is still tied to coal, the dirtiest fossil fuel. Coal is its largest source of electricity, and India plans to mine for more of it.
But India is aggressively trying to take advantage of a global energy transition and a backlash against Chinese dominance of new energy technologies.
Hoping to spur a clean energy manufacturing boom, the government is offering lucrative subsidies for locally produced solar cells and batteries, and it is restricting foreign products in its biggest renewable-energy projects. To cash in on government contracts to install rooftop solar for 27 million households by the end of this decade, for instance, companies must make the panels at home.
For New Delhi, there are social, economic and geopolitical imperatives. China is its most formidable rival -- the two countries have in the past gone to war over border disputes -- so India's quest to build solar, wind and EV factories is partly designed to secure its energy supply chain. At the same time, India wants to create good-paying manufacturing jobs.
Still, India confronts a problem facing many other countries: Either buy renewable energy technologies as cheaply as possible from China, or spend more to make the goods at home.
"Strategically, to ensure we have energy independence, we need to have manufacturing capacity," said Sudeep Jain, additional secretary in India's Ministry of New and Renewable Energy. "Currently, yes, there is a cost arbitrage."
The problem is that China commands the building blocks of renewable energy goods. More than 90 per cent of the polysilicon that goes into solar panels is in Chinese control. So, even as India rapidly expands its production of solar panels, it still imports most of the cells that go into the panels, mainly from Chinese companies. And Indian companies that make solar cells typically import silicon wafers mainly from China.
India has a tiny battery industry, and it has proved difficult, for a host of reasons, to scale up. Two Indian companies making EV batteries, Reliance Industries and Ola Electric, recently missed production targets they had promised to hit in exchange for government subsidies. It doesn't help that China dominates the processing of key battery minerals such as lithium.
China has "first mover's advantage," said Amit Paithankar, CEO of
Waaree Energies
, the country's largest maker of solar panels. "It's about us being proactive, and being a part of the solution in diversifying the supply chain for India, for the U.S. and for the world."
Borrowing China ideas
India is lifting from the Chinese playbook in at least one way. It is counting on its enormous domestic demand.
India's wind and solar capacity has nearly doubled in the past five years, according to the research firm Ember, making it the world's third-largest generator of electricity from renewable sources, after China and the United States. It plans to incorporate 500 gigawatts of non-fossil-fuel sources into its electricity grid by 2030.
The government has put in place both carrots and sticks to encourage production.
For the past several years, there were subsidies for locally produced solar panels. Those are now being discontinued, but new subsidies are kicking in next year for locally produced solar cells that go into panels, as well as for battery cells.
Domestic demand isn't the only driver. Last year, more than half of India's solar modules ended up on American soil.
Now, the wild card for India's export dreams is the tariff chaos sown by President Donald Trump.
The latest Trump administration duties on goods imported from India are far lower (27 per cent ) than new duties on Chinese goods (145 per cent ) and on those from Southeast Asia (up to 3,500 per cent ), where Chinese companies have set up shop.
Indian Prime Minister Narendra Modi has sought to cultivate warm relations with Trump, and officials from the two countries say they hope to negotiate a bilateral trade deal this month. "Whatever the United States is going to import, we may still be the most competitive to supply it," Jain said.
Wanted: More good jobs
The global energy transition potentially brings India something it badly needs: factory jobs.
Two of 3 Indians are younger than 35. A majority of people still work in agriculture. And manufacturing as a share of the national economy is still barely 13 per cent , a bit lower than it was a decade ago.
The southern state of Tamil Nadu has been among the most forceful in attracting new factories, including in the clean-energy sector. Wind-blade makers arrived nearly a decade ago, followed by solar-panel makers and EV companies.
Tamil Nadu offered ready land and government subsidies. The state supported pensions and housing for workers.
"These are all schemes we came up with, peering into the future, looking at how the world is going," the state's industry minister, T.R.B. Rajaa, said in an interview. "Energy is everything. Energy security must be localised."
Perhaps most important, Tamil Nadu, with a long record of women's education, offered an army of female workers with college degrees.
Which is how 26-year-old Amala K. came to chase her dreams at the
Tata Power solar
panel factory on the outskirts of a small town, Tirunelveli, near India's southern tip. (Like most people in the region, she uses her father's initial as a surname.)
About 2,000 women like her run the machines around the clock at this factory. Every day, starting at dawn, they move in and out by the busload. Dark-blue uniforms. Backpacks. Sandals that are traded for steel-toe factory shoes. The factory floor is largely automated. Human workers are there to make sure that robot arms are working properly, to solder a junction box or pick up broken shards of wafers that have slipped in between cracks.
The sun was shining bright and hot by 7 a.m. on a recent Wednesday, as Amala boarded a company bus after her all-night shift. The bus pulled out of the parking lot, drove past banana orchards, and weaved through a river of honking cars and motorcycles. Some of the women nodded off. A few scrolled through their phones.
Amala leaned against the window. For her, the job was partly a way to defer the inevitable arranged marriage. "If I stayed home, I'd be married by now," she said.
Between workshifts, she was preparing to take an exam to become a physics professor.
Varsha A.R., 26, sitting one row up, had to persuade her mother to let her take this job.
Her mother worried about Varsha living two hours away from home, in a workers dorm. So, Varsha brought her there and introduced her to other workers. "I explained that this is an opportunity for my life and my career," Varsha said.
The job meant different things to different female workers. Some said they were saving to buy gold jewelry for their weddings. Others said they were saving to go to graduate school. A few said they liked being able to buy gifts for their nieces and nephews -- or buy themselves an ice cream when they wanted.
Varsha and Amala stepped off the bus and walked down a narrow lane to their dorm, two workers in an energy industry all but unknown in their parents' time. Each year, at least 7 million young Indians like them enter the labor market, according to the International Labor Organisation. India's efforts to expand its clean-energy business is a key test of the country's efforts to deliver the skilled jobs that a new generation of Indians has come to expect.
The solar panels they help make in Tirunelveli furnish Tata Power's 4-gigawatt solar farm on the other side of the country, in the northwestern desert of Rajasthan. The wafers still come from China, as do many of the glass panels on which they are affixed.
The risks of relying on Chinese suppliers became abundantly clear during the coronavirus epidemic, Tata Power CEO Praveer Sinha recalled. Shipments were disrupted. There were unexpected price swings.
"It's very important you have a supply chain that's not vulnerable to two or three countries," he said.
At the time, during President Joe Biden's term, the United States agreed. The U.S. International Development Finance Corp., a government lender, supported the Tata project with a $425 million loan, with the goal of "diversifying global supply chains."
First Solar, a U.S. company, set up shop near the state capital, Chennai, also with financing from the U.S. government. Vikram Solar, which makes solar modules near Chennai, is set to build 1 gigawatt of battery storage.
In an industrial park farther west in Tamil Nadu, Indian electric scooter company Ola is getting ready to produce its own battery cells. At the moment, like most makers of electric cars and scooters in India, a majority of battery cells come from China.
Selling to America
The question for renewable energy companies now is whether they focus on the Indian market or push to sell Indian-made goods abroad.
Until recently, an export strategy was enormously profitable for Waaree. It made most of its money last year exporting its Indian-made solar panels to the United States. Lured by tax breaks offered by the Biden administration, Waaree invested $1 billion in a solar-panel plant in Houston.
Other companies' exports surged, too. Between 2022 and 2024, the export of Indian solar modules grew "exponentially" by 23 times, according to the Institute for Energy Economics and Financial Analysis, a research group. So spectacular was the growth that the group concluded that India could potentially replace Southeast Asian countries as the leading supplier of solar photovoltaics to the United States.
Then Trump took office. Solar's future in the United States became far more uncertain. Waaree stocks slumped. The company intends to continue to make solar panels for Americans, Paithankar said.
In the end, whether Indian companies can muscle in on the renewable energy supply chain depends less on India and more on the geopolitical trade-offs that every government will have to make. "Whether we can become an alternative to China depends on what other countries do," said Sumant Sinha, CEO of ReNew Power, which builds solar and wind equipment for the Indian domestic market. "If everyone says, 'I'm going to buy cheap,' then China will come out dominating."