The Indian solar PV market has come of age in the last two to three years, with the market growing from a ten-member sector to a well-organized market with more than 30 world-class PV module and cell suppliers.

The aggregate module production capacity rose from less than 60 MW in 2005 to more than 1 GW in 2009, setting India up as a possible major manufacturing hub for the global solar PV market. The market can now look forward to large-scale private investments across the PV value chain, especially in the production of polysilcion feedstock, silicon wafers, PV modules and cells, as well as balance of system components.  Successive reforms in the power sector and a plethora of policies initiated at the central and state level to control green house gas emissions and promote renewable energy has restored investor interest in the solar power industry, says the analyst of this research. Several private firms are expected make large investments to avail financial incentives and leverage the cost advantages of solar PV production in India.

The Indian Government has added impetus to the market by promoting solar energy to narrow the power deficit in the country. The Jawaharlal Nehru National Solar Mission (JNNSM) announced in 2009 is expected to infuse the much-needed competitiveness in the domestic market.

This program is mainly aimed at the wide-scale deployment of solar farms, roof top-based generation, and rural electrification. The successful implementation of the JNNSM can vastly benefit module suppliers, solar PV/ solar thermal-based independent power producers (IPPs), and system integrators.

The Indian solar PV market is likely to grow in terms of PV modules and cell exports to various developed nations in the world, notes the analyst. In fact, up to 75 percent of the total module production in India is anticipated to find its way to different solar markets in the European Union (EU) in the next two to three years.

Despite the robust government backing, the market is hindered by the high capital requirements and the risks posed by the lack for grid parity of large solar farms. Market participants will have to sort out the affordability issue if they desire wide-scale deployment of rural electrification programs.

The country also lacks a well developed transmission and distribution (T&D) network for evacuation of solar power from remotely located plants. Investors in solar power stand to gain greatly from the implementation of a renewable energy credit trading system, since it could significantly augment the chances of the development of solar farms, which are currently dependent on government subsidies.

Participants can feel hopeful about the future, as the solar PV market has already achieved global standards. In terms of quality, the PV modules and cells manufactured in India are considered at par with those manufactured in the developed nations. India, with its advantages of lower labor costs, offers domestic PV suppliers opportunities to manufacture economical, yet high quality modules and cells, enabling them to gain an edge in the world market, observes the analyst.