Can India, Europe Produce Solar Energy Without China?

Italy's recent auction for solar projects, specifically excluding Chinese-manufactured equipment, revealed the significant challenge Europe faces in diversifying its solar supply chain. The winning bids averaged 17% higher than unrestricted auctions, demonstrating a willingness to pay a premium for alternatives to Chinese panels. Despite this, over 90% of solar modules installed in the European Union are still imported from China, which controls more than 80% of the world's solar component production across the entire value chain.

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China is present in almost every global solar supply chain.

India has made substantial strides in developing its domestic solar manufacturing capabilities, with policy initiatives like the "Make in India" campaign, tariffs, and a Production-Linked Incentive scheme. According to Sanjay Varghese, a senior executive at ReNew, India's solar module manufacturing capacity reached 172 gigawatts in early 2026, with cell capacity nearly tripling to 30 gigawatts. He noted that five years ago, all modules were imported, but now, domestically produced modules and about 50% of cells are consumed in India. Hopes are high for achieving a complete domestic value chain within five to seven years.

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Five years ago, all solar modules being installed in India were being imported from China. But today, all modules, and about 50 percent of the cells being consumed in India, are made in India.

However, analysts caution against overestimating India's immediate ability to replace China's dominance. Jochen Rentsch of the Fraunhofer Institute for Solar Energy Systems identified wafers as a critical bottleneck, with China producing approximately 99% of the world's photovoltaic wafers. The ability of Chinese manufacturers to price wafers below production cost presents a significant economic hurdle for new competitors. Dries Acke of SolarPower Europe noted that India's manufacturing capacity already exceeds its domestic demand, suggesting a strong push for export markets.

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This clearly means that you will have a country looking for export opportunities.