India photovoltaic revolution! Battery capacity will explode to 80GW
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India photovoltaic revolution! Battery capacity will explode to 80GW

India's traditional reliance on the use of Chinese-made cells to assemble photovoltaic modules is undergoing a dramatic shift, with a new government mandate aimed at rapidly ramping up domestic solar cell capacity.

As of June 2024, India's solar cell capacity is 7.6GW, less than 10% of its 77.2GW module capacity. However, market research firm Mercom India expects India's battery capacity to jump significantly to more than 80GW by 2026. By that year, this figure will account for nearly 50% of the 172GW of module capacity expected to be in operation.

When asked about this ambitious feasibility projection, Raj Prabhu, CEO of Mercom Capital Group, told PV Tech Premium that the main reason for the expansion was the reimplementation of the Model and Manufacturer Approval List (ALMM) in April this year. ALMM stipulates that components can only be sourced from local manufacturers in India.

In addition, India's domestic procurement mechanism stipulates that more than 25GW projects must use components made of domestic solar cells. Capacity-linked incentives are expected to boost that figure even further.

Raj Prabhu said the Indian government's plan could "effectively eliminate all battery imports."

India's Ministry of New and Renewable Energy has also proposed expanding the scope of ALMM to include solar cells, which would require manufacturers to source cells only from listed suppliers by 2026.

"If international suppliers are not included, this could lead to the de facto elimination of all battery imports," Prabhu said.

Competing with China in the face of oversupply

Hariharan acknowledges that the government-led push is ambitious. He noted that even achieving the 50-60 percent target would be a major success, especially in the context of China's dominance and global solar oversupply.

Since Chinese modules cannot be exported to India, India's PV products are somewhat insulated from this trend.

"Indian manufacturers cannot compete directly with Chinese manufacturers on cost," Prabhu explained. "But with the re-implementation of ALMM, imports were shut out and Indian manufacturers had their own market. While the cost of components made in India is high, other products are not available to developers."

Hariharan acknowledged that when it comes to PV technology, China's production costs are unrivaled, largely due to heavy government subsidies. But he also highlighted China's ability to deliver high-quality products at such low prices.

"So Indian manufacturers have to catch up, and until that happens, even domestic procurement requirements will only protect Indian manufacturers to a certain extent." At the end of the day, the raw materials or inputs needed for local manufacturing also come from the Chinese market."

Improve the quality of manufacturing in India

Hariharan highlighted the challenge of competing with China's low-cost production and high-quality manufacturing, which have benefited from heavy government subsidies.

"Indian manufacturers need to reach this level of quality. Until then, domestic procurement requirements only protect them to a certain extent, especially as raw materials and imported products often still come from China."

In addition, to address this dependency, Indian authorities have taken a number of steps. Recently, Indian authorities determined that imports of solar glass from China and Vietnam had "harmed" India's domestic glass manufacturing industry, and therefore proposed to impose anti-dumping duties on these imports.

The issue of product quality also remains a challenge for India's ambitions to establish a vertically integrated PV manufacturing chain. Hariharan recounted his own arbitration cases in which Indian-made PV cells failed to achieve the expected power output after just eight years of operation.

Prabhu added: "Developers are very concerned about the quality of locally made batteries and components, especially from smaller manufacturers. Larger, established manufacturers are producing higher-quality products but need to expand capacity. It takes time to fix the quality problem."