The domestic solar photovoltaic (PV) module manufacturing capacity is expected to touch 60 gigawatts (GW) by 2025, according to Icra.

At 60 GW, there will be a 62 per cent growth in module manufacturing capacity compared to the current level of 37 GW, the rating agency said on Monday.

 It is likely to increase to nearly 100 GW as the capacity awarded under the production-linked incentive (PLI) scheme comes on stream, led by the strong policy support and growing demand from domestic solar power installations, Icra said.

The solar PV module supply chain is dominated by China, with over 80 per cent share in manufacturing capacity across polysilicon, wafer, cell, and modules.

In comparison, the manufacturing capacity in India is relatively low and is largely restricted to the last manufacturing stage.

 The PLI scheme is expected to change this, with integrated module units expected to come up in India over the medium term.

 The Government of India (GoI) has awarded incentives for setting up a module manufacturing capacity of 48 GW, including fully integrated facilities of 24 GW, i.E., from polysilicon to module.

 The capex outlay for setting up these integrated module capacities is estimated to exceed Rs 1 lakh crore.

Given the significant scale-up expected in manufacturing capacity, garnering a share of the global demand through exports would remain critical for domestic solar OEMs (original equipment manufacturers). Vikram V, Vice President & Sector Head - Corporate Ratings, ICRA, said, "While the abeyance of the Approved List of Models & Manufacturers (ALMM) order till March 2024 and sharp decline in global module prices is leading to an increase in PV module imports in FY2024, the expected scale-up in domestic manufacturing capacity with backward integration over the next two to three years, along with resumption of the ALMM order, is expected to reduce import dependence."

Apart from module capacity, the OEMs are expected to enhance the wafer and cell manufacturing capacities with cell capacity expected to cross 25 GW by 2025 from the current level of 6 GW.

However, the country will remain dependent on polysilicon imports as these capacities are likely to take longer to set up, involving a larger capital investment, he said.