An Analysis of Industrial Policy Support for the Indian Solar Photovoltaic Manufacturing Sector

National renewable energy policies often have many goals, and frequently an aspiration is the development of domestic renewable energy technology manufacturing capacity. The Jawaharlal Nehru National Solar Mission (NSM) in India is an example; besides targeting an installation of 20GW of grid-tied solar power capacity, it includes industrial policy to strengthen a photovoltaic solar manufacturing base. We develop and apply a framework to examine the likely efficiency and equity implications of the policy’s domestic content requirement (DCR), which requires 100% of crystalline silicon cells and modules in NSM plants to be sourced domestically. We suggest that any efficiency improvements would be driven largely by surplus gains by domestic manufacturers at the potentially large expense of electricity consumers. Our analysis reveals three observations that suggest this equity implication is unlikely to change throughout the NSM: (1) developers continue to favor substitute thin-film technology, bypassing the DCR, (2) the manufacturing base has become less competitive over time, and (3) ancillary domestic industries that could provide complementary skills are uncompetitive.