India is expected to commission more solar capacity in 2026 than in any previous year, with annual additions projected to exceed 50 GWdc, according to Wood Mackenzie’s report From Modules to Cells: India Deepens its Solar PV Push. The growth comes amid rising supply constraints and higher system prices linked to the implementation of the Approved List of Models and Manufacturers-II (ALMM-II).
India added 34 GWdc of solar capacity in the first half of 2026, representing a 38% increase from H1 2025. Developers accelerated project commissioning ahead of the June deadline for ALMM-II, which requires modules used in government-supported projects to be manufactured using domestically produced solar cells. If the forecast is achieved, 2026 additions will surpass the previous annual record of 49 GWdc set in 2025.
The accelerated deployment was also supported by the phased reduction of waivers on inter-state transmission charges. The waiver declined from 75% to 50% for projects commissioned from July 2026 and is scheduled to be phased out completely after July 2028.
Solar Growth Expected to Slow in H2 2026
Wood Mackenzie expects solar deployment to moderate in the second half of 2026 as constraints in domestic cell manufacturing capacity and rising module prices weigh on project development. However, ALMM-II waivers for net metering and open-access projects until December 31, 2026, could provide additional support to installations.
The Ministry of New and Renewable Energy (MNRE) also agreed in July 2026 to waive the ALMM-II requirement for projects nearing completion, subject to applicants having submitted their applications by July 23, 2026.
Sureet Singh, Research Analyst at Wood Mackenzie, said ALMM-II is a significant step towards building an integrated domestic solar supply chain, but noted that cell manufacturing capacity has not kept pace with module production, creating near-term cost pressures for developers.
India’s Solar Import Dependence Shifts to Southeast Asia
While ALMM-II has reduced India’s direct dependence on Chinese solar cell imports, sourcing has increasingly shifted towards Southeast Asia. Indonesian solar cell imports nearly tripled in early 2026.
During the first five months of 2026, India imported 5 GW of wafers and 20 GW of solar cells, with wafer imports increasing 86% YoY to support domestic cell manufacturing. India currently imposes a 20% basic customs duty on imported solar cells and modules.
In September 2025, the Directorate General of Trade Remedies (DGTR) recommended additional anti-dumping duties of up to 30% on Chinese-origin solar cells and modules. A final decision from the Central Government is still pending.
Wood Mackenzie said delays in commissioning the 14 GW of cell manufacturing capacity currently under construction could increase import dependence and put further upward pressure on prices. An additional 130 GW of cell capacity is expected to come online by 2029, requiring a 49% compound annual growth rate from the projected 88 GW full-build capacity in 2026.
Solar System Prices to Remain Elevated Through 2027
Despite the expected increase in domestic cell manufacturing, Wood Mackenzie forecasts continued supply shortages in 2027. Indian cell production is projected to reach 29 GW, which would remain 21 GW below average annual module demand of around 50 GW.
As a result, system prices are expected to decline by only 3% between Q4 2026 and Q4 2027. Prices are expected to stabilise through 2029 as additional domestic cell manufacturing capacity becomes operational.
Mathew Thomas, Research Analyst at Wood Mackenzie, said policy consistency and timely execution by manufacturers will be critical to stabilising prices. The planned implementation of ALMM-III in June 2028, which would extend domestic content requirements to solar wafers, indicates that India’s push to deepen its domestic solar manufacturing ecosystem will continue.
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