Solar Cell Shortage Idles 46 of India’s 140 Small and Medium Panel Makers

Indian solar panel manufacturers have started halting or slowing production after rules effective from June 1 pushed them to use domestically made solar cells instead of imported Chinese components. The disruption has hit standalone module makers hardest, with companies facing long waits for locally produced cells and warning of pressure on jobs and project timelines.

Why the June 1 Rules Triggered Factory Shutdowns

The pressure point sits between two parts of the solar supply chain. India has built a large module-making capacity, but many manufacturers still depend on external solar cells.

After the new sourcing rules took effect, producers who earlier used Chinese cells had to find domestic alternatives. Several standalone module makers said the resulting supply gap has forced shutdowns or shorter production cycles, with some factories running only three to four days a week.

How Wide Is India’s Solar Manufacturing Gap?

India’s module capacity looks large on paper, but cell production has not kept pace. Panel makers cannot replace imported cells overnight when local factories are either unavailable, underused, or still ramping up.

Rajan Kalsotra, senior consultant at EUPD Research, said India faces a steep cell supply deficit and that closing the gap will likely take 3 to 5 years, given that new facilities require capital, technology partnerships, and long commissioning periods.

What Manufacturers Are Reporting on the Ground

The All India Solar Module Manufacturers Association said small and medium producers account for 60% of India’s panel manufacturing capacity. Nearly one-third of the 140 such makers have stopped output, while others have cut production cycles.

Icon Solar chairman Shailendra Shukla said the company has been affected by domestic cell unavailability for three months. He expects output to fall sharply to about 1 GW from 3.2 GW. Manufacturers without in-house cell plants are facing waiting periods of 6 to 8 months for domestically produced cells.

Why China Remains Central to India’s Cell Supply

India still relies heavily on China for solar cells. Key figures:

• China accounts for about 95% of India’s solar cell imports
• Such imports rose 37% in the last fiscal year to approximately $1.86 billion
• China has restricted exports of solar manufacturing technology, equipment, and technical support, making it harder for India to expand local cell output quickly

Cosimo Ries, analyst at policy consultancy Trivium China, said China is likely to preserve its dominance in solar manufacturing, where it already holds a strong position across most segments of the supply chain.

What the Government Has Said?

India’s clean energy ministry said it had not received formal reports of production halts by standalone module makers. The ministry said it was monitoring prices and expected adequate cell manufacturing capacity to come online within six months.

Manufacturers put forward a more cautious timeline. Bringing new cell capacity into operation takes considerably longer because the process involves specialised equipment, technology access, and commissioning before plants can run at scale.

Final Outlook: Why This Matters for India’s 2030 Solar Target

A slower rollout could push power planners to rely more on coal-based generation to meet rising electricity demand. The risk extends beyond factory downtime; if panels become costlier or projects slip, the wider clean-energy transition timeline comes under pressure.