Indian Solar Module Exports to US Face Stagnation from 2025 Under IRA

India's photovoltaic module exports to the United States — which grew 16 times in value between FY2022 and FY2023 — are likely to stagnate from 2025 and decline from 2027 as domestic US manufacturing capacity enabled by the Inflation Reduction Act comes online. The global PV module manufacturing capacity expanded from 358 GW to 640 GW between 2022 and 2023, signalling intense competition ahead for Indian exporters.

The Inflation Reduction Act, signed in August 2022, provides layered production incentives and investment tax credits for solar PV manufacturing in the United States, including for upstream components such as polysilicon, ingots, wafers, and cells. Based on public announcements, US solar module manufacturing facilities with a total capacity of 50 GW could be operational by 2026. The European Union is developing a comparable incentive framework under its Green Deal, with more than 31 GW of new module manufacturing capacity announced for the region. China currently accounts for 80–90% of global PV manufacturing capacity, and BloombergNEF estimates 2023 global installations will grow 46% year-on-year to 392 GW.

Several Indian manufacturers are pursuing a dual strategy in response: establishing module assembly lines in the US to capture IRA incentives while retaining cell and ingot/wafer manufacturing in India. Indian players hold at least a one-year head start over US-based manufacturers because PLI-1 tranche capacities were awarded in November 2021. The report, by IEEFA and JMK Research, notes that upstream component manufacturing — polysilicon, ingots, and wafers — involves far more complex and capital-intensive processes, making US-based production of these inputs more challenging than module assembly.

Future iterations of India's Production Linked Incentive scheme are expected to incorporate IRA-inspired features, including layered incentives for upstream components, extended policy periods, and easier eligibility criteria. After 2027, Indian manufacturers must pivot to African and South American export markets to sustain momentum. The report notes that the global transition to green hydrogen will also create large additional demand for solar PV panels by FY2027, opening further export opportunities. With annual global solar installations forecast to reach at least 1 terawatt by 2030, aggregate demand will be sufficient to support multiple manufacturing geographies simultaneously.

Key figure — Indian solar PV module exports to the US grew 16 times in value from FY2022 to FY2023.