INDIA SOLAR PV MODULE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

India Solar PV Module Market Size and Trends

India solar PV module market is estimated to be valued at USD 8.05 Bn in 2024 and is expected to reach USD 15.19 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 9.5% from 2024 to 2031.

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The government of India has set an ambitious target of producing 450GW of renewable energy by 2030, and this boosts investments in solar projects. Favorable net-metering policies and tax incentives for residential solar installations have boosted demand from the rooftop solar segment. Low module prices and continuous technological advancements makes solar energy more accessible and cost-effective as compared to traditional energy sources. The interest of major global module manufacturers to increase production capacity in India can drive the market growth

Market Driver - Government supportive policies and initiatives

Indian government focuses on accelerating the development of renewable energy sources. With growing concerns around energy security and environmental degradation caused by excessive dependence on fossil fuels, the leadership recognizes solar as a vital avenue to address the twin challenges of ensuring adequate power availability as well as reducing carbon footprint. Favorable policies and programs rolled out in the last few years have incentivized investments and enhanced uptake of solar power technologies.

Jawaharlal Nehru National Solar Mission was launched in 2010 with an ambitious goal of deploying 20 GW of grid-connected solar power by 2022. This provided the much-needed impetus to solar entrepreneurs and manufacturers to gear up and participate in this new sunrise sector. The target has been achieved well ahead of schedule and stands revised to 100 GW. Introduction of auctions or competitive bidding for large utility-scale projects can also drive the market growth. The e-reverse auction mechanism has significantly lowered the prices at which projects are awarded to developers, making solar energy more cost-competitive against conventional sources. Multiple states have followed this model to meet their renewable purchase obligations at economical tariffs.

The government is promoting rooftop solar schemes to encourage installations at the residential and commercial levels. Capital subsidies under the MNRE's rooftop program have stimulated small-scale adoption. Recently introduced provisions like net-metering further strengthen the business case for households and industrial/commercial establishments to install solar PV systems. Favorable policies such as accelerated depreciation, generation-based incentives, and tax exemptions increases the appeal of localization, and indigenous manufacturing of solar panels, and related components. The production linked incentive scheme is aimed at boosting domestic production capabilities.

The government's firm policy resolves and follow up actions have generated a thriving market ecosystem for solar PV modules and related products. Both the large-scale utility segments as well as the decentralized rooftop market segments witness high growth rates. The policy environment is conducive for sustained capacity expansions by developers and technology providers due to medium to long term government targets. Supportive policies and programs at central and state levels can drive the India solar PV module market growth.

Market Concentration and Competitive Landscape

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Falling module prices

Pronounced downward trend in solar module prices worldwide has played a seminal role in shaping India's solar PV module market. Continuing technology innovation coupled with rapidly increasing manufacturing capacities have led to significant reductions in production costs for solar panels over the past decade. Lower costs have translated to cheaper per unit costs for solar power generation, enhancing the competitive positioning of solar energy against traditional energy sources. This price decline phenomenon enables larger scale adoption across India.

The module price decline curve tells a remarkable story - from over US$ 4/Watt in 2010, international benchmark prices have now fallen below US$ 0.4/Watt according to industry reports. This represents a staggering ten-fold decrease in a span of just 10 years that has made solar power increasingly competitive on an unsubsidized basis in several market scenarios. Indian module manufacturers and project developers have also directly benefitted from these reductions in sourcing of equipment. Reduced capital expenditures for projects have supported lower project commissioning costs and tariffs discoverable through competitive bidding.

Large utility scale installations as well as decentralized rooftop segments find stronger commercial viability even after accounting for balance of system costs. The payback periods have progressively shortened, strengthening the financial case for investments. This has allowed for more aggressive targets to be set for capacity additions as the resource can now deliver power at tariffs on par or even below prevailing power pool prices from the grid. 

Key Takeaways from Analyst:

India solar PV module market growth is driven by declining cost of solar modules and supportive government policies promoting renewable energy usage. Government targets for installing 100GW of solar power capacity by 2022 also boosted module procurement. Residential rooftop segment is expected to witness highest growth due to rising roof top solar initiatives by various states.

Interstate transmission issues and land acquisition challenges may slow down some large-scale projects. Finance availability can also pose challenges for small developers and residential consumers. Module price volatility and safeguard duties imposed by the U.S. have impacted domestic module suppliers. Southern states like Telangana, Karnataka and Andhra Pradesh have emerged as high growth markets due to early adoption. Punjab, Haryana and Rajasthan also offer significant opportunities due to their solar resource potential.

Module imports, especially from China and Southeast Asian nations, have a sizeable share in fulfillment of demand. Domestic manufacturing push under production linked incentive schemes could enhance competitiveness over time. Rising module efficiency standards and wider availability of bifacial and other advanced technologies can boost replacement demand in the mid-term. With a favorable policy environment,

Market Challenge - Intermittency nature of solar power

Intermittency nature of solar power can hamper the India solar PV module market growth. Being dependent on sunlight, solar PV modules can only generate power during daytime and the power output keeps fluctuating throughout the day based on availability of sunlight. This makes solar power unreliable to meet round-the-clock electricity demand of residential and industrial customers. The storage of solar power generated during daytime for usage at night still remains an expensive option. Finding cost-effective solutions for large-scale electricity storage will be crucial to address the intermittency challenge and allow higher penetration of solar power into the India's energy mix. Unless this issue is resolved, reliance on non-renewable sources like coal will continue for base load power requirements.

Market Opportunity: Off-grid and decentralized applications

Off-grid and decentralized renewable energy applications in India offer growth opportunities for the India solar PV module market growth. Large section of India's population still lacks access to reliable electricity supply from the grid. Several industrial and agricultural operations in rural areas also depend on diesel generators for meeting their energy needs. Rooftop and small-scale solar systems offer a viable solution to electrify off-grid villages and decentralized applications. These can help displace costly diesel usage and improve energy access for millions. This off-grid solar market is can witness growth in the near future due to various government initiatives. It can boost demand for domestically manufactured solar PV modules and components.

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Insights, By Type: Technological advantage boosts adoption for monocrystalline

In terms of type, monocrystalline segment is estimated to contribute the highest market share of 48.4% in 2024, owing to its technological superiority over other types. Monocrystalline modules use high purity silicon, that is grown as a single crystal ingot using the Czochralski process. This allows for maximum light absorption within a solar cell and higher conversion efficiencies as compared to polycrystalline and thin-film modules. The conversion efficiency of monocrystalline modules averages around 20%, while polycrystalline and thin-film modules are typically lower.

The higher efficiency means monocrystalline panels can generate the same amount of power using less roof space. This makes them an attractive option for residential rooftops, where space is limited. The technology also witnesses improvements as manufacturers invest heavily in R&D to push efficiencies even higher. Factors like reduced manufacturing costs and higher durability have also boosted monocrystalline adoption over other alternatives in the market.

Insights, By End User: Residential sector dominates due to rooftop potential

In terms of end user, residential segment is estimated to contribute the highest market share of 52.2% in 2024, due to extensive rooftop potential across urban and suburban regions. India has a growing middle-class population with rising disposable incomes that seek to reduce their energy costs. Residential solar panels offer a cleaner and cost-effective substitute to traditional grid power. With around 27 million new homes projected to be built in India by 2022, rooftop installations for self-consumption provide an attractive and sustainable option.

Several state governments offer rebates, subsidies and tax incentives on capital invested in residential solar projects. Combined with falling prices of panels, this has made small-scale rooftop systems increasingly viable for homes and apartments. Various awareness initiatives by government organizations and solar companies have also boosted solar adoption among residential prosumers looking to play their part in energy security and climate change efforts.

Insights, By Application: Grid connected projects drive large scale adoption

In terms of application, grid-connected segment is estimated to contribute the highest market share of 45.5% in 2024, due to large scale commercial and utility applications. India has set ambitious renewable energy targets to reduce fossil fuel dependence and meet growing baseload power demands through sustainable means. Solar energy, as an indigenous and abundant resource, play a major role in achieving these targets through large commercial and utility-scale solar parks.

Several state-run utilities and independent power producers have been installing gigawatt-scale solar parks connected to the national grid under national programs. Joint ventures with global developers can transfer critical technology expertise to set up competitive solar manufacturing hubs within India as well. Streamlined approvals, open access to transmission infrastructure and long-term power purchase agreements with state discoms at preferential tariffs have accelerated the development of massive grid-connected projects across the country. Large commercial and industrial users are also increasingly setting up dedicated on-site solar capacity for self-consumption needs.

Market Report Scope

Key Developments

• On August 14, 2024, Vikram Solar launched the Suryava module, its first Hetero Junction Technology (HJT)
• In 2022, Government of India, along with the Solar Energy Corporation of India Limited (SECI) and the World Bank, signed agreements for significant financial support to enhance the country's power generation capacity through cleaner and renewable energy sources. This includes a USD 150 million loan from the International Bank for Reconstruction and Development (IBRD), a USD 28 million loan from the Clean Technology Fund (CTF), and a USD 22 million CTF grant. The agreements reaffirm India's commitment to achieving its ambitious target of 500 gigawatts (GW) of renewable energy by 2030.
• In 2022, Amazon India announced plans for three solar farm projects in Rajasthan, collectively boasting a clean energy capacity of 420 megawatts (MW). This announcement is part of the company's broader initiative to develop utility-scale renewable energy projects in India. 
• In 2022, SJVN (Satluj Jal Vidyut Nigam Ltd) was awarded a 125-megawatt solar project in Uttar Pradesh, following a competitive bidding process conducted by the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA)

*Definition: India solar PV module market refers to the market for solar photovoltaic modules in India. As renewable energy generation emerges as a major focus area for the country, the demand for solar PV modules has been growing rapidly. Solar PV modules are a key component for setting up solar power plants and rooftop solar installations across industries, commercial establishments and households. Key players in India are manufacturing solar PV modules to cater to this growing domestic demand.

Market Segmentation

• By Type Insights (Revenue, USD Bn, 2019 - 2031)
• • Monocrystalline
  • Polycrystalline
  • Thin-Film
• By End User Insights (Revenue, USD Bn, 2019 - 2031)
• • Residential
  • Commercial
  • Utility-Scale
• By Application Insights (Revenue, USD Bn, 2019 - 2031)
• • Grid-Connected
  • Off-Grid
• Key Players Insights
• • Tata Power Solar
  • Adani Solar
  • Waaree Energies
  • Vikram Solar
  • RenewSys
  • Emmvee
  • Azure Power
  • Jakson
  • Goldi Solar
  • Servotech Power Systems
  • Saatvik Green Energy Pvt. Ltd.
  • Moser Baer Solar
  • Websol Energy System Ltd.
  • Photon Energy Systems Ltd.
  • SWELECT Energy Systems Ltd.
  • Premier Solar Systems Pvt. Ltd.
  • Surana Ventures Ltd.
  • Jupiter Solar Power Ltd.
  • Sova Solar
  • KSK Energy Ventures