India solar module output to exceed 125 GW in 2025, says Wood Mackenzie

<p class="p1"><span class="s1">Wood Mackenzie says in a new report that India’s solar manufacturing boom risks overcapacity and calls for a shift from expansion to cost competitiveness.</span></p><p><a href="https://www.pv-magazine.com/region/india/" rel="noopener" target="_blank"><span style="font-weight: 400;">India</span></a><span style="font-weight: 400;">&#8216;s solar module manufacturing capacity is on course to surpass 125 GW in 2025, more than triple its current domestic market demand of around 40 GW, according to analysis by </span><a href="https://www.pv-magazine.com/tag/wood-mackenzie/" rel="noopener" target="_blank"><span style="font-weight: 400;">Wood Mackenzie</span></a><span style="font-weight: 400;">.</span></p>
<p><span style="font-weight: 400;">The consultancy said in its latest report that this growth will lead to an inventory buildup of 29 GW by the third quarter of 2025. </span>This figure compares to an inventory buildup of 13 GW as of the final quarter of 2023, and of 22 GW as of the final quarter of 2024.</p>
<p><span style="font-weight: 400;">Wood Mackenzie said the capacity surge highlights the success of the country’s production-linked incentive (PLI) scheme, but comes at a time when India is seeing a sharp downturn in its primary export market.</span></p>
<p><span style="font-weight: 400;">As a result of the 50% reciprocal tariffs imposed by the United States, solar module exports from India to the US fell by 52% across the first half of 2025 when compared to the first half of 2024. </span></p>
<p><img alt="" class="size-medium wp-image-321795 aligncenter" height="210" src="https://www.pv-magazine.com/wp-content/uploads/2025/10/Screenshot-2025-10-31-at-10.01.41-600x210.png" tabindex="0" width="600" /></p>
<p><span style="font-weight: 400;">“India’s government's PLI scheme has been highly effective in spurring factory announcements, but the industry is now seeing warning signs of rapid overcapacity similar to those that preceded China's recent price collapse,” said Yana Hryshko, head of solar supply chain research at Wood Mackenzie.</span></p>
<p>Cost differentials now stand out as a key challenge <span style="font-weight: 400;">to India’s solar manufacturing market. An Indian-assembled module using imported solar cells costs at least $0.03/W more than a fully imported Chinese module, while a module made entirely in India under new domestic content requirements would cost more than double Chinese-manufactured modules, said Wood Mackenzie. </span></p>
<p><span style="font-weight: 400;">Hryshko added that despite such near-term challenges, India still holds the clearest potential to become the “only credible, large-scale alternative to the Chinese solar supply chain”. She suggested that India’s success now depends on shifting from just building capacity to achieving cost-competitiveness.</span></p>
<p><span style="font-weight: 400;">“This will require a pivot to aggressive research and development, investment in next-generation technology, and a strategic push to open new export markets in Africa, Latin America, and Europe,” Hryshko said. “The foundation is built; this is the next step to securing long-term success.” </span><span style="font-weight: 400;"> </span></p>
<p><span style="font-weight: 400;">Wood Mackenzie’s analysis also points out that India is deploying robust protective measures to support domestic manufacturers, including an </span><a href="https://www.pv-magazine.com/2025/08/06/india-approves-solar-cell-makers-with-13-gw-of-annual-production-capacity/" rel="noopener" target="_blank"><span style="font-weight: 400;">Approved List of Models and Manufacturers</span></a><span style="font-weight: 400;"> (ALMM) and a recommended </span><a href="https://www.pv-magazine.com/2025/10/10/market-eyes-indian-buying-surge-ahead-of-anti-dumping-duty-on-chinese-cells/#:~:text=On%20September%2029,of%20this%20year." rel="noopener" target="_blank"><span style="font-weight: 400;">30% anti-dumping duty</span></a><span style="font-weight: 400;"> on Chinese cells and modules.</span></p>
<p><span style="font-weight: 400;">By the end of the first half of the year, India’s PLI scheme had </span><a href="https://www.pv-magazine.com/2025/08/08/indias-pli-scheme-drives-18-5-gw-solar-module-capacity-by-june-2025/" rel="noopener" target="_blank"><span style="font-weight: 400;">established</span></a><span style="font-weight: 400;"> 18.5 GW of module capacity, 9.7 GW of solar cell capacity and 2.2 GW of ingot-wafer capacity. Government figures also indicate that the scheme awarded a total 48 GW of module manufacturer capacity by the same date.</span></p>