Solar Modulemakers Flag Cell Supply Gap as Domestic Sourcing Norms Bite: Industry Fears Rising Costs Amid Capacity Crunch

Solar Modulemakers Flag Cell Supply Gap as Domestic Sourcing Norms Bite: Industry Fears Rising Costs Amid Capacity Crunch​

Concerns over solar cell availability and rising costs are mounting among module manufacturers following the enforcement of mandatory domestic sourcing norms, according to a report by Economic Times. The regulations, which came into effect on June 1st, have created apprehension within the industry regarding the balance between domestic cell production and massive module demand.

Industry representatives sought relief from officials at the Ministry of New and Renewable Energy (MNRE) both prior to and after the rollout of the second phase of the Approved List of Models & Manufacturers (ALMM-II), seeking solutions for supply chain disruptions, ET reported. The concerns specifically focus on a perceived imbalance between India’s module manufacturing scale and its current domestic solar cell production base.

Module Capacity Outpacing Cell Production​

A significant mismatch is apparent when comparing existing manufacturing capabilities. While the country boasts an estimated module manufacturing capacity of around 225 GW, approximately 193 GW of which is listed under ALMM-I, the dedicated domestic solar cell capacity currently stands at roughly 30 GW, ET reported.

The Rajasthan Solar Association noted that not all current cell manufacturing output comprises high-efficiency cells, yet these advanced products account for the majority of market demand. This disparity adds layers of complexity to the transition toward a fully self-reliant solar ecosystem.

Industry Rebuttal and Future Projections​

In contrast, manufacturers of solar cells maintain that supply remains sufficient to meet current consumption levels. They assured ET that substantial additional production capacities are scheduled to become operational in phases through December.

Industry players also suggested that projects mandating domestically sourced content should not encounter shortages during the calendar year 2026. One cell manufacturer stated that there is an overcapacity within modules, estimating the annual requirement at around 50 GW.

Market Outlook and Capacity Expansion​

The Indian Solar Manufacturers Association (ISMA) provided forward-looking estimates for demand. ISMA projected that the demand for domestically produced solar cells will reside in the range of 22–25 GW during calendar year 2026.

Meanwhile, ISMA anticipates a strong expansion in manufacturing capacity, expecting India’s domestic solar cell capability to grow by nearly 103 GW by the end of this year. Of this significant projected capacity addition, about 50 GW is already under construction and expected to be commissioned over the coming months.

Policy Response Amid Self-Reliance Push​

The renewable energy ministry, while acknowledging industry concerns, did not grant a blanket deferment on the ALMM-II timeline when requested by stakeholders. Instead, conditional exemptions were provided for certain projects, as reported by ET.

The Ministry has maintained that its policy decisions are carefully calibrated to ensure complete policy certainty within the domestic solar manufacturing ecosystem. This stance is strongly aligned with advancing India's broader goal of self-reliance across the entire renewable energy sector.