Indian solar PV exports soar 23-fold in 2 years: What is fuelling this meteoric rise?

The export value of Indian photovoltaic (PV) products rose more than 23 times in just two years between FY2022 and FY2024, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA). This exponential rise has largely been driven by three PV manufacturers – Waaree Energies, Adani Solar and Vikram Solar, helping India transition from a net importer to a net exporter of photovoltaic products.

An overwhelming 97% of these PV module exports were to the United States in FY2023 and FY2024. With an increasing demand for Indian PV products and the attractive incentive structure under the Inflation Reduction Act (IRA), many Indian manufacturers have already announced plans to establish manufacturing facilities in the US.

What is fuelling this meteoric rise of PV module exports from India?

The IEEFA report attributes this export boom to several factors, including the subdued demand in domestic markets amid the government’s decision to delay implementing the Approved List of Models and Manufacturers (ALMM) to April 2024. This is pushing Indian manufacturers to seek international markets.

The global shift to a “China Plus One” supply chain strategy has also benefitted India’s solar sector. Many countries seek to diversify their supply chains away from China, making India an alternative manufacturing hub.

“India’s rapidly growing PV manufacturing ecosystem positions it as a strong alternative for solar manufacturing,” the report said.

Healthier profit margins on PV modules have also contributed to the shift as manufacturers reported 40-60% higher profit margins on US exports compared to the domestic market.

“Based on industry interviews that JMK Research conducted with manufacturers, the tunnel oxide passivated contact (TOPCon) module4 price in the US is approximately US¢ 26-30 per Watt-peak (Wp) vis-à-vis approximately US¢ 15-18 per Wp in India,” the report added.