Solex Energy Chairman Chetan Shah has warned of strategic vulnerabilities in India’s solar sector due to heavy reliance on Chinese technology. With significant gaps in domestic cell and wafer production capacity, the company is urging the government to extend manufacturing mandates and increase financial incentives to secure the long-term supply chain.
Solex Energy has raised a red flag regarding India's heavy reliance on Chinese technology for solar projects. The company’s Chairman, Chetan Shah, has called for a stronger domestic push to reduce dependence, specifically citing the current uneven manufacturing structure in the Indian solar sector. While India has built a large module manufacturing capacity of 262 GW as of June 2026, the foundational supply chain remains weak, leaving developers vulnerable to potential global export restrictions.
The Manufacturing Bottleneck
The central issue is a significant mismatch in the domestic manufacturing value chain. While India has scaled up module production, internal cell manufacturing capacity stands at approximately 37 GW. The situation is even more constrained in the upstream segments, with ingot and wafer capacity estimated at just 2 GW, and domestic polysilicon production currently non-existent. Because China reportedly controls 75% to 90% of the global supply chain, this gap creates a strategic risk for Indian solar projects that depend on imported components to meet their timelines and cost targets.
Policy Support and Capital Needs
To bridge this gap, Solex Energy has advocated for a 12-month extension of the Approved List of Models and Manufacturers (ALMM-II) mandate. This regulation requires developers to source modules from an approved list, ensuring quality and encouraging domestic production. An extension would provide companies with the policy certainty needed to commission new, advanced manufacturing lines. The industry is also pushing for a more robust Production Linked Incentive (PLI) framework to encourage investment in high-end photovoltaic manufacturing.
Investor Context and Operational Risks
For investors, this transition presents both opportunities and risks. Solar manufacturing is highly capital-intensive, and the sector is currently in the midst of a technological shift. Many older facilities still rely on aging Mono PERC technology, which is becoming less competitive compared to newer, more efficient standards. Consequently, manufacturers like Solex Energy and its peers are under pressure to upgrade their technology to remain viable.
Investors should monitor how the company balances its capital spending on new, advanced capacity with its existing debt and cash flow. Any move toward deeper integration, such as manufacturing cells and wafers, requires significant upfront investment and execution capability. Furthermore, the company's financial health will remain linked to government policy decisions, such as the continuation of the ALMM mandate and the successful implementation of PLI schemes. The next key updates to track will be any government announcements regarding the extension of these mandates and the company's progress in expanding its manufacturing footprint beyond basic module assembly.