India’s exports of solar photovoltaic (PV) products surged 23 times to $2 billion in the fiscal year (FY) 2024 from FY22, according to a new report.

This marks a significant progress in India transitioning from a net importer to a net exporter of solar products, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

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Among the factors listed for the increase in exports is that other countries are mow considering India as a viable option for their “China Plus One” strategy, and domestic PV manufacturers looking to sell their products at a higher premium abroad.

In terms of markets, the US has emerged as a key market for Indian solar PV exports. More than 97 per cent of Indian solar PV exports went to the US in both FY2023 and FY2024, the report states.

“Focussing on the US market can benefit the Indian PV manufacturing ecosystem. The exposure to the US market will enable Indian PV manufacturers to attain economies of scale, ultimately enhancing their product quality and competitiveness,” says the report’s contributing author, Vibhuti Garg, Director –South Asia, IEEFA.

“But, to truly establish India as a global manufacturing hub in the long run, Indian PV manufacturers must focus on upstream backward integration. This will help India maintain its foothold in existing markets while unlocking untapped markets like Europe, Africa, Latin America, etc,” she added

At the same time, the report also noted that it is important for PV manufacturers in India to balance the needs of the growing export market with domestic availability.

“During periods of domestic supply shortage, certain distributed renewable energy segments, such as residential rooftop solar, could be affected due to their smaller order sizes. This can make it difficult for developers to secure enough supplies to execute their projects. The supply-demand gap also affects solar module prices, which is a critical factor for the price-sensitive residential rooftop solar segment,” said Jyoti Gulia, Founder, JMK Research.

The report estimated that annual module production by Indian solar PV manufacturers in FY2025 and FY2026 will likely be 28 gigawatts (GW) and 35GW, respectively.

“After accounting for exports, the resultant supply by Indian PV manufacturers in the next two years will be only 21GW and 25GW, respectively, which is less than the requirement of approximately 30GW per annum to meet India’s 2030 renewable energy target,” according to Prabhakar Sharma, Senior Consultant, JMK Research.

The report highlighted that adopting a multi-pronged export-oriented approach while balancing domestic demand would augur well for India’s climate goals.

“India is on the cusp of an energy transition revolution, with solar technology being a critical enabler. Ensuring that India meets its domestic demand while simultaneously establishing itself as a viable alternative to Chinese-origin PV products will contribute significantly to achieving the country’s renewable energy goals,” said Garg.