India’s Solar Capacity May Hit 190 GW By 2027, Raising Oversupply Concerns: SBI Capital

New Delhi, Aug 25 (KNN) India’s solar industry may face a potential oversupply as cumulative installations are projected to reach 190 gigawatts (GW) by 2027, according to a recent report by SBI Capital. 

The concern stems from shrinking export opportunities following recent US policy changes that roll back incentives for solar projects.

The report estimates that India will require a steady-state module manufacturing capacity of 100 GW, with annual capacity additions of 40–50 GW necessary to meet renewable energy targets. 

Over the past two years, India’s module manufacturing ecosystem has expanded sharply to nearly 100 GW, supported by schemes such as the Production Linked Incentive (PLI) and the Approved List of Models and Manufacturers (ALMM), along with favourable global conditions.

Solar installations in FY25 grew 60 percent year-on-year to 24 GW, driving module demand to an estimated 50 GWdc. While module manufacturing has matured, solar cell capacity remains below 30 GW. 

SBI Capital noted that the rollout of ALMM-II, effective August 31, 2025, will require projects under net metering and open access to source cells from approved domestic manufacturers. 

This is expected to bolster domestic cell production, particularly in the commercial and industrial (C&I) segment.

Cell capacity is projected to expand significantly, moving towards self-sufficiency over the medium term. However, the limited availability of domestically produced cells could temporarily raise project costs and temper bidding interest. 

Despite progress in module and cell capacity, India’s presence in wafer and polysilicon production remains negligible. Although the government has set a target of 40 GW wafer capacity by March 2027, on-ground progress has been modest. 

Rising global polysilicon prices have already squeezed margins for international manufacturers lacking full integration. In this context, the report highlighted India’s PLI scheme as a key driver for enabling integrated capacity across the value chain, from polysilicon to finished modules.

(KNN Bureau)