India’s solar module manufacturing capacity has surged to 233 GW, outpacing domestic demand and pushing factory utilization down to 35–40%. A new IEEFA-JMK Research report warns that continued capacity additions could intensify pressure on margins and increase the risk of stranded assets.
India has gone from relying on imports for more than 90% of its solar modules to becoming the world’s second-largest solar module manufacturing hub, with 233 GW of production capacity as of June 2026. However, manufacturing capacity has expanded faster than market demand, leaving factories operating at just 35% to 40% utilization, below the 50% to 65% generally considered necessary for sustainable operations.
A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research, “Assessing overcapacity risk in India’s solar PV manufacturing market,” finds that manufacturing expansion has been heavily concentrated in modules.
India’s module manufacturing capacity is now nearly seven times its cell capacity and 116 times its ingot and wafer capacity, according to the report. This has left upstream segments such as cells, wafers and polysilicon relatively underdeveloped and the supply chain dependent on imported inputs, predominantly from China.
