In December 2025, Italy granted more than 1.1 gigawatts of solar capability throughout 88 tasks in the nation’s very first auction limited solely to tasks developed without Chinese-manufactured devices.
The winning quotes balanced EUR66.38 ($75.80) per megawatt hour, 17% above the cost embeded in an unlimited eco-friendly auction kept in 2025, according to information from Italy’s electrical power services company, GSE.
It was a purposeful premium, paid to purchase solar hardware from anywhere besides China. With more than 90% of solar modules set up in the European Union still imported from China, the auction exposed simply how thin Europe’s options actually are.
China still produces more than 80% of the world’s solar parts, controling every phase of the worth chain from polysilicon to complete modules. That scale has actually provided inexpensive panels to the world, however it has actually likewise left the federal governments in Brussels and New Delhi significantly anxious about relying so greatly on a single provider.
“China is present in almost every global solar supply chain,” Ajay Srivastava, creator of the Global Trade Research Initiative, informed DW. Even panels put together in India or Vietnam, he stated, normally depend on Chinese-made cells, wafers or polysilicon even more up the chain.
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India’s production push
India’s change from purchaser to contractor has actually been fast, a minimum of on paper. The nation’s solar photovoltaic(PV)module production capability reached 172 gigawatts(GW)in early 2026, while cell capability has actually almost tripled to 30 GW.
This shift has actually been mostly policy-driven.
Sanjay Varghese, a senior executive at Indian company ReNew, credited the federal government’s “Make in India” push– tariffs and non-tariff barriers, such as the Approved List of Models and Manufacturers (ALMM), backed by an approximately $ 2.5 billion Production-Linked Incentive (PLI) plan– with improving the sector nearly over night.
“Five years ago, all solar modules being installed in India were being imported from China,”Varghese stated. “But today, all modules, and about 50% of the cells being consumed in India, are made in India.”
Varghese is confident that the total worth chain from modules, cells, wafers, ingots, and polysilicon to even metallurgical-grade silicon will end up being domestic within 5 to 7 years.
Dries Acke, CEO of SolarPower Europe, explained India’s capability as currently overtaking its own need. “This clearly means that you will have a country looking for export opportunities,”Acke stated.
Where the limitations lie
Experts likewise warned versus overemphasizing India’s preparedness to change China.
Jochen Rentsch, head of innovation transfer at the Fraunhofer Institute for Solar Energy Systems, indicated wafers as the important traffic jam: approximately 99% of the world’s photovoltaic wafers are still made in China. He likewise cautioned that Chinese producers can price wafers listed below production expense, making it “nearly impossible” for brand-new entrants to contend on economics alone.
While India has actually ended up being mainly self-dependent in cells and modules, Rentsch included, it stays based on China for wafers, polysilicon and production devices, recommending that a shift towards Indian panels would just transfer part of the procedure instead of remove Europe’s direct exposure to China.
Varghese acknowledged the exact same space from the market side, keeping in mind that India still counts on Chinese companies for the tools and equipment required to produce solar items, which China continues to lead the world in solar innovation advancement.
Europe’s policy space
Europe’s situation, nevertheless, is various. Germany alone has actually set a target of sourcing 80% of its electrical power from renewables by 2030, an objective that needs huge volumes of imported clean-energy hardware, much of it still connected to Chinese supply chains.
According to BSW-Solar, the German solar association, domestic module production in Germany has actually diminished to a little, niche-market operation, though the nation maintains more powerful positions in inverters, installing systems, battery storage and upstream production devices.
Acke argued Europe requires its own variation of India’s PLI plan, an output-based aid, comparable in spirit to the United States Inflation Reduction Act’s tax credits, to make regional production commercially practical.
The EU’s upcoming Industrial Accelerator Act, meant to construct on the Net Zero Industry Act, 2024, has actually dissatisfied supporters like Acke by specifying “Made in Europe” broadly enough to consist of free-trade partners instead of needing actual European production.
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To make matters worse, United States tariffs on Indian items have actually squeezed export potential customers somewhere else, pressing Indian makers to look more difficult at Europe. Varghese kept in mind that anti-dumping and countervailing responsibilities on Indian-origin cells and modules in the United States now surpass 250%, successfully closing that market for now.
India’s geographical position does use some benefits. Rahul Sharan, deputy director and shipping professional at Drewry, an independent maritime research study consultancy, kept in mind that India’s west coast ports link effectively to Europe through the Suez Canal, possibly reducing shipment times compared to its East Asian competitors.
Still, he warned that logistics “alone is unlikely to eliminate the structural cost advantages that China has built through scale and integration.” Sharan likewise flagged the Strait of Malacca– through which more than 60% of international maritime trade passes– as a relentless chokepoint whose interruption, whether from South China Sea stress or US-China competition, might ripple through solar supply chains far beyond Asia.
A long roadway ahead
While specialists argue that, in the meantime, India stays the most reliable option to China emerging throughout solar production, it is not yet a replacement. Srivastava recommended that authentic production ability takes 10 to twenty years to develop which reward plans like India’s PLI typically motivate assembly instead of deep production.
He thinks the only sensible course is a collaborated “China-plus-one” Technique, with the United States, Europe, India and others investing in parallel supply chains even if the output expenses 10 to 15% more. “At present, however, that political and industrial leadership is missing,” Srivastava stated.
This post becomes part of the India-Germany Climate and Energy Journalism Programme arranged by Clean Energy Wire, supported by Heinrich Böll Stiftung.
Modified by: Karl Sexton
