MNRE Mandates to Use Local Ingots, Wafers
The Ministry of New and Renewable Energy (MNRE) has recently proposed a mandate requiring clean energy developers to use locally manufactured solar ingots and wafers starting June 2028, a move aimed squarely at reducing dependence on imports, particularly from China.
Building the Solar Value Chain from the Ground Up
To understand the significance of this policy, it’s important to look at how solar panels are made. Solar modules contain cells, which are built from wafers, derived from ingots. While India has made impressive progress in module and cell manufacturing, it still relies heavily on imports for upstream components like wafers and ingots.
By expanding the Approved List of Models and Manufacturers (ALMM) framework to include these upstream components, the government is targeting a holistic domestic manufacturing ecosystem. This aligns with India’s broader vision of achieving 500 GW of non-fossil fuel capacity by 2030.
Phased Localization Strategy
India’s approach is structured and phased:
- June 2026: Mandatory use of domestically manufactured solar cells
- June 2028: Mandatory use of locally produced ingots and wafers
This gradual transition gives industry players time to scale operations and invest in capacity building.
Current Capacity and Investment Momentum
At present, India has only about 2 GW of ingot and wafer manufacturing capacity, a small fraction of what’s needed to meet growing solar demand. However, momentum is building. Leading companies have announced significant investment plans to scale up domestic production.
Industry estimates suggest that ₹20,000–25,000 crore in financial support may be required to build 50 GW of upstream capacity, indicating both the scale of ambition and the challenge ahead.
Reducing Dependence on China
China currently dominates global solar manufacturing, offering cost advantages of up to 10–35% compared to other regions, according to the International Energy Agency. By mandating local sourcing, India aims to de-risk its supply chain, enhance energy security, and insulate itself from global disruptions.
Opportunities and Challenges
Ø Opportunities:
- Boost to domestic manufacturing and job creation
- Stronger energy security
- Increased value addition within India
- Attraction of long-term investments
Ø Challenges:
- Higher production costs compared to global benchmarks
- Limited current capacity in upstream segments
- Potential short-term increase in solar project costs
- Risk of slowing installations during the transition phase
Rising global commodity prices have already impacted renewable equipment costs, and this policy could add pressure in the near term.
A Strategic Shift Toward Self-Reliance
The expansion of the ALMM framework marks a significant evolution in India’s renewable energy policy, from focusing on assembly to building a fully integrated manufacturing ecosystem. Since its introduction in 2019, ALMM has already driven rapid growth in downstream capacity, with module manufacturing surging from 8.2 GW in 2021 to 172 GW, and cell capacity reaching 27 GW in a short span.
India’s proposal to mandate locally manufactured solar ingots and wafers is more than a policy tweak, it’s a strategic shift toward energy independence and industrial resilience. While challenges remain, especially in scaling upstream manufacturing, the long-term benefits could position India as a global solar manufacturing hub.
As the country balances cost pressures with strategic priorities, this move underscores a clear message that the future of India’s solar sector will be built at home.
About Indosol Solar
Indosol Solar Pvt. Ltd. is the solar PV Manufacturing arm of Shirdi Sai Electricals Limited (SSEL). It is spearheading India’s Renewable Energy mission by developing fully vertically integrated giga-scale solar PV manufacturing ecosystem, spanning the entire value chain from quartz to high efficiency solar photovoltaics modules. It has commenced operations with a 500MW module manufacturing facility at Ramayapatnam in Andhra Pradesh. It is rapidly scaling up and aims to achieve 10GW of integrated solar PV manufacturing capacity by 2027.