India's solar manufacturing boom has turned into a glut, with the country's own success now posing a challenge. The Indian solar manufacturing industry, once a victim of its own success, is now facing a glut due to a surge in production. This surge was fueled by a push to expand local production, encouraged by pandemic disruptions and strained relations with China. Since 2020, capacity has jumped 13-fold, nearly tripling domestic demand. The government has urged caution, and manufacturers are pulling back from lower-value output. This glut is a stark contrast to the booming demand just a few years ago. India's solar module-assembly plants are now operating at around 40% capacity, down from over 70% in 2023. This is not a slowdown, but a structural glut, according to industry experts. The country's reliance on imports for upstream components, such as cells and wafers, is set to change with new mandates. This could lead to another glut in cell manufacturing, with capacity expected to increase fourfold over the next two years. The problem is that India's demand hasn't kept pace with production. While domestic consumption is increasing, it's still dwarfed by manufacturing capacity. Exports have been hit by tariffs, and uncertainty looms over the market. One solution is to find alternative markets overseas, leveraging the Export-Import Bank of India to finance solar power projects in regions like Africa. However, not everyone will survive the glut, particularly as technology evolves and less-advanced companies struggle to keep up investments. The future of India's solar manufacturing industry is uncertain, with the potential for a glut to break the back of mid-sized companies.
