India’s Solar Manufacturing Faces Setback as Domestic Cell Shortage Shuts Factories

India’s push to strengthen domestic solar manufacturing has run into a major hurdle, with several solar panel factories either shutting down or cutting production due to a shortage of locally made solar cells. Industry sources told Reuters that new rules introduced on June 1 restricting the use of imported Chinese cells have left manufacturers waiting up to eight months for domestic supplies. As a result, nearly one-third of India’s small and medium-sized solar panel makers have halted production, while others have significantly reduced operations.

The shortage is raising production costs, threatening thousands of jobs, and delaying renewable energy projects. India currently has around 200 GW of solar panel manufacturing capacity but only 27 GW of solar cell production capacity, with effective output estimated at just 16–18 GW. Experts believe it could take three to five years to bridge the gap because setting up advanced solar cell manufacturing facilities requires significant investment, technology, and time.

India remains heavily dependent on China, which supplies about 95% of its imported solar cells. Industry officials also say Chinese export restrictions on solar manufacturing technology and equipment are slowing India’s efforts to expand domestic production. Analysts warn that unless cell manufacturing increases rapidly, the shortages could delay India’s goal of achieving 500 GW of non-fossil fuel power capacity by 2030 and increase reliance on coal-based electricity in the meantime.

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