INDUSTRY
Renewable energy ministry asks lenders to be cautious in financing solar PV projects
- IBJ Bureau
- Dec 08, 2025
The Ministry of New and Renewable Energy has urged banks and other lenders to be cautious in financing new solar photovoltaic (PV) module manufacturing capacity. The advisory comes amid potential oversupply of solar modules in the local market, according to a letter from the ministry reviewed by the Reuters has shown.
Several Indian companies have expanded solar module capacity over the past three years, targeting exports to the US. But higher US tariffs and increased scrutiny by the US on Indian shipments for China-made components have hit exports, raising concerns of oversupply in India, where new solar project installations have slowed due to weak demand.
In the letter, the ministry has told the Finance Ministry to advise lenders “to adopt a calibrated and well-informed approach while evaluating proposals for financing additional standalone solar PV module manufacturing capacity”. The New and Renewable Energy Ministry and the Finance Ministry have not responded to a Reuters’ request for comment.
This is the first time that India’s clean energy ministry has acknowledged the risk of oversupply of solar modules, also known as solar panels, in local solar markets.
India’s solar module manufacturing capacity is expected to rise by a third to 200 gw in the next few years, while its cell production could grow nearly four-fold to 100 gw, exceeding the local demand, the ministry has said.
The ministry has suggested that lenders should prioritise funding for integrated facilities that can produce solar cells, ingots, wafers and polysilicon to reduce India’s reliance on imports mainly from China.
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