Strategies for solar PV manufacturing in India: Harnessing stakeholder inputs

• Indigenous Component and Material Shortages in the Solar PV Production Chain. • A paradigm shift in priorities to enhance domestic manufacturing of SPV modules. • Despite compensation, addressing the causes of disadvantages is essential. • Frequent policy reversals and conflicting policies contribute to uncertainty. • An ecosystem for the domestic production of equipment and ancillaries is crucial. The significantly high concentration in global manufacturing capacities of solar Photovoltaic (PV) modules and components poses challenges for import-dependent countries, including India, in terms of supply chain disruptions stemming from unpredictable international economic and political occurrences. Other implications of high imports include the lagging command of the embedded technology, and a crumbled domestic manufacturing of the components, machinery, and equipment. Therefore, the development of a robust domestic manufacturing ecosystem is critical to supporting the long-term sustainability of India’s clean energy transition. India’s proactive stance is noted through the recent measures committed to strengthening domestic manufacturing. These include the Approved List of Models and Manufacturers (ALMM) mandate, the Production Linked Incentive (PLI) scheme, and the implementation of Basic Customs Duty (BCD). At this crucial juncture, early knowledge of the perceived opportunities and constraints shaping competitiveness in the solar PV sector will be valuable in creating a thriving environment for manufacturing facilities. Using a PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) framework, this paper draws on the insights from consultations with three categories of stakeholders – domestic manufacturers, experts and associations, and the government, to identify shared priorities for the success of India’s solar PV industrial ecosystem. In-depth consultations show that the newly introduced measures are received with much interest by firms. However, frequent policy reversals, conflicting policies, and the lack of a predictable environment contribute to uncertainty in the business environment for domestic manufacturers. While tenure-based compensation for disabilities – such as high logistic costs, scale inefficiencies, and fragmented supply chains – is helpful in the short term, addressing the root cause of lower competitiveness is essential. There is a strong voice for developing the entire ecosystem, which includes the production of equipment and ancillaries within India. The findings and suggestions are not only relevant for India and other countries/regions but also have the potential to guide the policy for other renewable energy sources, thereby shortening the experimentation cycle.