US tariffs, missing cells, evening power gaps: India's solar bottlenecks

India's solar sector is hitting three hard walls at once. US tariffs on solar imports are squeezing exporters. A shortage of solar cells is slowing domestic projects. And the grid still struggles to keep the lights on after sunset.

The US imposed tariffs on solar cells and modules in 2018, and they've stayed in place. For Indian manufacturers, that closed off a major market. Exports to the US dropped sharply. Some companies shifted focus to domestic projects, but the timing was bad.

India's own solar manufacturing is skewed. The country has plenty of module assembly capacity, but not enough cell production. Cells are the building blocks of panels. Without them, module makers rely on imports, mostly from China. When global supply chains wobbled, so did Indian solar timelines.

"We have modules, but no cells," said one industry executive, who asked not to be named. "It's like having a car factory but no engines."

The government has tried to fix this with production-linked incentives for cell and module manufacturing. New factories are coming up in Gujarat, Tamil Nadu, and Andhra Pradesh. But they take time. Until then, developers scramble for cells, often paying a premium.

Meanwhile, the grid has its own problem. Solar power peaks at midday. But electricity demand peaks in the evening, when solar fades. That gap is filled by coal and gas, or by expensive battery storage that's still rare in India.

"Evening peak is the real test," said a grid operator in Delhi. "We can handle the afternoon. But when the sun goes down, we need other sources."

Battery storage is growing, but slowly. A few large tenders have been awarded, and some states are piloting storage projects. Costs are falling, but they're still high. For now, the evening gap remains.

The US tariff issue adds another layer. India wants to be a global solar manufacturing hub, but without access to the US market, the economics are tougher. Some Indian firms are looking at other export markets like Europe and the Middle East. But the US is the biggest prize.

"Tariffs are a barrier, but we have to diversify," said a spokesperson for a leading Indian solar company. "We're exploring new markets, but it's not easy."

Back home, the government's target of 500 GW of non-fossil capacity by 2030 looks ambitious. Solar is the biggest piece. But bottlenecks in cells, tariffs, and evening power could slow the pace.

For now, India's solar story is one of promise and problems. The sun shines, but the system needs work.