Domestic Solar Cell Mandate

Context

From June 1, 2026, the Union Government has made it compulsory for new net-metering and open access solar projects to use solar cells manufactured within India, aiming to strengthen domestic renewable energy manufacturing.

About Domestic Solar Cell Mandate

1. The policy is rooted in India’s effort to build a complete solar manufacturing ecosystem. In the solar value chain, polysilicon is converted into ingots, wafers, solar cells, and finally solar modules, with solar cells being the core component that converts sunlight into electricity.
2. Although India has developed a large solar module manufacturing base, its solar cell production capacity remains much lower, resulting in continued dependence on imported cells despite strong domestic assembly capabilities.
3. The mandate covers rooftop solar projects operating under net-metering arrangements, including PM Surya Ghar: Muft Bijli Yojana, as well as open access projects that directly supply renewable energy to commercial and industrial consumers.
4. While industry sought more time to adapt, the government decided against a general extension, allowing only limited relief for projects that had already made substantial progress.
5. Industry stakeholders have raised concerns that domestic cell production may not be sufficient to meet demand. Since many module manufacturers rely on externally sourced cells rather than producing them in-house, the new requirement could create procurement challenges and increase dependence on larger integrated companies.
6. Another concern is the possibility of market concentration, as companies manufacturing both cells and modules may gain a significant advantage. Smaller firms could face financial pressure, potentially reducing competition across the sector.
7. Manufacturers have also warned of higher project costs, as domestically produced cells currently command premium prices. Combined with underutilized manufacturing facilities, weaker export opportunities, and pressure on ancillary industries, the transition may create short-term economic challenges for parts of the solar ecosystem.
8. Supporters of the mandate argue that it will provide long-term investment certainty, encourage backward integration into cell manufacturing, reduce reliance on foreign supply chains, and accelerate the growth of an indigenous solar industry.
9. They believe expanding domestic cell capacity will strengthen energy security, support Atmanirbhar Bharat, and help India move from being primarily a solar installer to becoming a major manufacturing hub in the global renewable energy sector.

Conclusion

The domestic solar cell mandate represents a shift towards building self-reliance across the entire solar value chain. Its long-term success will depend on expanding manufacturing capacity rapidly while ensuring that growth remains competitive, affordable, and inclusive for all industry participants.