India’s Indigenous Solar Cells Set To Meet Half Of FY27 Demand As ALCM Boosts Domestic Manufacturing – CRISIL

India’s solar manufacturing sector is expected to witness a major transformation this fiscal year as indigenous solar cells are projected to meet nearly half of the country’s total solar cell demand. This marks a significant increase from the last fiscal year, when domestic manufacturers supplied only about one-fourth of the demand. The growth is being driven by government measures aimed at reducing dependence on imports and strengthening domestic manufacturing capabilities.

According to a recent study by Crisil Ratings, the implementation of the Approved List of Cell Manufacturers (ALCM) is expected to play a crucial role in increasing the share of locally manufactured solar cells. The Ministry of New and Renewable Energy (MNRE) introduced the ALCM following the successful implementation of the Approved List of Models and Manufacturers (ALMM). The move is intended to ensure greater use of domestically produced components in India’s solar photovoltaic supply chain.

The ALCM requirements came into effect from June 2026 and apply to utility-scale projects with bid submission dates after August 31, 2025. The rules also cover net-metering and open-access projects commissioned after June 1, 2026. However, residential rooftop consumers participating in the PM Surya Ghar: Muft Bijli Yojana under the “Give It Up” category have been exempted until March 31, 2027.

Crisil Ratings estimates that India’s total solar cell demand will reach around 60-65 GW this fiscal year. Domestic manufacturers are expected to supply nearly half of this requirement, while the remaining demand will be met through imports. Demand for indigenous cells is expected to come from new utility-scale projects, open-access installations, net-metering projects, and government-supported schemes such as Kisan Urja Suraksha Evam Utthaan Mahabhiyan (KUSUM).

To capitalize on the growing demand, several manufacturers are investing heavily in expanding solar cell production facilities. As a result, India’s solar cell manufacturing capacity is expected to nearly double and reach around 60 GW by the end of the current fiscal year. Additional capacity expansions are also planned for the following fiscal year.

However, experts caution that the rapid increase in manufacturing capacity may create challenges for profitability. With more production facilities entering the market, capacity utilization levels and product prices could come under pressure. This may extend the payback period for new investments by one to two years compared to early manufacturers that benefited from higher margins and favorable market conditions.

Despite these challenges, companies that pursue deeper backward integration into ingot and wafer manufacturing are likely to achieve better returns. Since these materials are currently largely imported, domestic production could improve profitability and strengthen the country’s solar manufacturing ecosystem. Industry observers will also closely monitor any policy exemptions and project delays that could affect future demand for domestically manufactured solar cells.