It wasn’t a difficult decision for 65-year-old Ramzan and his family to sell their farmland in the arid village of Khirasara in India’s northwestern state of Gujarat to a solar park developer.

“Farming did not bring a lot of profit,” Ramzan told Climate Home News. But “the solar power plant promised jobs and prosperity”.

Three years on, Ramzan lives surrounded by a sea of solar panels and high transmission lines – with a front seat to India’s solar revolution.

One of the local solar parks belongs to Indian multinational conglomerate Adani, which is perhaps better known for its coal business. But most of the solar panels in the area are stamped with the same three words: “Made in China” – the world’s largest solar PV manufacturer, which dominates over 80% of all production stages.

However, future Indian solar parks may tell a different story. Faced with an accelerated solar build-out, the Indian government has set out to compete with Chinese solar cell and panel imports to meet its needs with made-in-India technology.

And the state of Gujarat – one of the most solar-developed in the country – is at the heart of India’s – and Adani’s – solar manufacturing efforts.

From his house’s flat roof, which is covered in a layer of coal soot, Rabari has a view of Adani’s 4.6 GW coal-fired power plant, the second largest in India. Not far from here, lie the company’s solar ambitions.

In recent months, Adani’s pivot to renewable energy projects have provided the conglomerate with a financial buoy amid a crisis which saw its stock tumble following accusations of accounting fraud and stock price manipulation. The group denies the allegations.

Locally, Adani’s solar plans have ushered in new economic opportunities.

Here, the company wants to develop an entire solar manufacturing supply chain. It already produces copper, aluminium, and glass, which are all needed to make solar panels.

Rabari told Climate Home that local people were finding jobs at nearby solar parks as security staff, drivers, cleaners, and grass-cutters for 10,000-15,000 rupees ($120-180) a month – above the minimum wage. But higher paying and skilled opportunities are lacking, he said.

In the nearest city of Bhuj, retailer Nitesh Patel, who buys solar panels from Adani and other manufacturers to sell to residential and commercial projects, is excited about made-in-India solar panels. His customers want to buy high-quality Indian products, he told Climate Home. “There is a lot of profit” to be made, he said.

The polysilicon challenge

Manufacturing solar modules from imported cells requires low capital expenditure and India’s cheap labour makes it well-placed to scale the industry, Satyendra Kumar, who began researching solar power in the 1980s and later spent years in the industry, told Climate Home.

But going down the supply chain to produce wafers, ingots, and polysilicon, “the process becomes capital intensive and the technology risk is high,” said Sunil Rathi, director at Waaree Energies, another leading solar panel manufacturer, which recently raised funds to make solar components.

The production process is also more energy-intensive and “the cost of energy and power in India is high. That is why India never really got into making polysilicon, ingots or wafers,” added Juzer Vasi, founder of the National Centre for Photovoltaic Research and Education, at the Indian Institute of Technology Bombay.

But “no matter how expensive, it makes sense for us to try to do it, purely from the point of view of energy security,” Vasi told Climate Home.

Still, this is a tall order. India’s production of polysilicon, ingots, and wafers must be scaled up from virtually zero at the start of 2023.

Despite a rapid acceleration in India’s manufacturing capacity, it remains heavily reliant on Chinese imports. According to BloombergNEF, around two-thirds of India’s imports of cells and 100% of wafers came from China since the start of 2021 and that is unlikely to change this year.

In Mundra, Adani has had to manage its expectations. A first goal to achieve 2 GW of ingot producing capacity by the end of 2023 was missed. But a spokesperson for the company said the facility would be operational by March, citing compliance issues. The target of producing 10 GW of fully Indian-made modules by 2027 “remains the ultimate goal,” they said. The company didn’t respond to several requests to visit its factory.

Government support

To boost domestic production, the Indian government launched a scheme that rewards selected solar manufacturers with funding for the production and sale of polysilicon, wafers, and solar cells and modules, which meet compliance checks.

Analysts at Ieefa have described the Production Linked Incentive (PLI) scheme as “one of the primary catalysts spurring the growth of the entire PV manufacturing ecosystem in India”.

But industry insiders say incentives will need to be strengthened if India is to scale-up its manufacturing ecosystem over the coming years. It “excites the industry but it does not really assist them to set up a solar factory,” said Kumar.

Some have recommended expanding the scheme to include manufacturing machinery, upfront subsidies for setting up production units, and subsidised electricity tariffs.

With China mulling restrictions on exports of wafer production technology, Kumar is concerned that India might be shut-out of key technological know-how before it can scale its own production.

“Even with policies like PLI, the conundrum is how will producers make the upstream raw material if China does not help,” he told Climate Home, calling for stronger cooperation between India and western nations to diversify the solar supply chain.

To bolster demand at home, India has taken steps to curb Chinese imports, by imposing custom duty taxes of 40% and 25% on imported modules and cells respectively.

But a glut in the market has seen the price of high-quality Chinese solar panels drop to a historic low. Even with the custom tax, imported Chinese modules remain slightly cheaper than Indian ones.

Earlier this year, a policy requiring all government energy projects to only use solar cells and modules from an approved list of Indian manufacturers was postponed until the end of March 2024, giving time for local production to catch up with the pipeline of projects.

Solar industry leaders have raised concerns that the lack of maturity of domestic solar production, the curb on imports, and growing exports to the US at the expense of domestic use could make it more difficult and expensive for India to meet its renewable energy goals.

As solar panel manufacturer Bluebird Solar put it in a blog post: “There is still a long way to go in terms of promoting domestic manufacturing and ensuring the successful execution of existing solar projects. Only by tackling these challenges head-on can India truly harness the potential of solar energy and achieve its ambitious renewable energy targets in the years to come.”

Main image: Women walk inside a solar park near Mundra,Gujarat, to fetch water / Mitul Kajaria