India is poised to become the second-largest producer of solar modules by 2025, according to a report by Wood Mackenzie. This will surpass Southeast Asia and the majority of the production is expected to cater to US demand for solar modules.

The report also highlights that China will hold over 80% of the global capacity for the solar module supply chain from 2024. However, India’s ambition to boost its module exports to the US market is facing challenges due to high production costs caused by a 25% basic customs duty on imported solar cells. There are rumors that the Indian government might lower the duty on Chinese modules in order to support export ambitions, as Chinese modules currently have a 40% tax.

On the other hand, the US is developing its own photovoltaic manufacturing capabilities under the Inflation Reduction Act, but remains dependent on imports due to the absence of domestic production of wafers, cells, or glass. The country’s dependence is expected to continue once President Biden’s temporary waiver on solar import tariffs expires in mid-2024.

China has a lead in N-type cell technology, accounting for 95% of announced global expansions in this area. Vertically integrated manufacturers may still find opportunities for growth despite tightened profit margins in the sector.

Additionally, Southeast Asia’s solar capacity is mainly driven by Chinese investments and Europe has been demanding protective tariffs on Chinese modules due to non-competitive prices. These shifts highlight the changing dynamics of