By Sethuraman N R
NEW DELHI, April 21 (Reuters) – India is staring at a severe shortage of solar cells as new rules from June mandate the use of locally made cells, a move that could derail some clean energy projects, an industry organisation said in a letter to the renewable energy ministry.
The South Asian country has around 25.6 gigawatt of solar cells production capacity against demand of about 50 GW, with imports from China accounting for more than 90% of India’s solar cell demand, the North India Module Manufacturer Association said in the letter dated April 7.
A copy of the letter was reviewed by Reuters.
Around 55% of solar cells, a key component in making modules that turn sunlight into electricity, are produced in India using older technology and are rarely used in new projects, creating a mismatch between supply and project needs.
India, which is banking on solar power generation to meet its 2070 net-zero goal, already mandates the use of locally made modules. However, most of these modules are built using cells imported from China.
Mandatory use of local cells from June would drive up module prices and delay projects across the pipeline, the association said, asking the government to consider a phased rollout after nine months from June, as nearly 50 GW of solar cell capacity under construction is expected to become operational within a year.
“Immediate enforcement of mandates under these constraints may lead to severe supply shortages of compliant cells, escalation in module costs, disruptions and delays in project execution and adverse impact on India’s renewable energy targets,” said the association.
Manufacturers, including private firms Solex Energy and Rayzon Solar have also warned that the new mandate could disrupt existing 170-GW module manufacturing capacity, needing domestic cell supplies.
The clean energy ministry has not responded to Reuters’ email seeking comments.
(Reporting by Sethuraman NR; Editing by Nidhi Verma and Eileen Soreng)
