Costly modules drag India's solar deployment

This has led to a shortfall in the rollout.

The higher cost module in India has slowed down the country’s deployment of solar energy projects between 2024 and 2026, according to the International Institute for Sustainable Development.

In a report, the organisation said that its analysis showed that the domestic manufacturing policies for solar pushed project costs up. Solar modules were at least 30% costlier than imported modules in the past year.

The higher cost of modules slowed down deployment for both large- and small-scale projects between 2024 and 2026, causing the country to fall short of its 2030 capacity goal by around 20 gigawatts.

India has three main choices to address the gap, namely removing or reducing trade and non-trade barriers; increasing subsidies to manufacturing or deployment; or addressing other impediments to solar deployment.

According to the analysis, reducing customs duty from 40% to 10% and removing the non-trade barriers could boost deployment by around 7 GW by 2030. The remainder of the shortfall could be addressed through the electricity sector and the reform of government solar programmes.

The organisation also said that support from the Production Linked Incentive is already enough to bridge the cost differential between domestic and imported panels. The manufacturing sector just needs time to respond to the scheme and develop economies of scale.