India’s Production Linked Incentive (PLI) Scheme for High-Efficiency Solar PV Modules is one of the most consequential industrial policies the country has implemented in the renewable energy sector. Launched in 2021 and now operating in its second tranche, it has driven a manufacturing transformation that is reshaping how Indian EPCs procure cells and modules — and where the supply chain advantage now lies.

This guide explains the PLI scheme in practical terms: what it is, what it has achieved, how it affects module pricing and availability, and what it means for procurement decisions in 2026.

What Is the PLI Scheme for Solar?

The PLI Scheme for National Programme on High Efficiency Solar PV Modules was approved by the Union Cabinet in April 2021 with a total outlay of ₹24,000 crore across two tranches.

Its core mechanism: cash incentive payments to manufacturers, disbursed over five years post-commissioning, based on the volume of high-efficiency solar modules manufactured and sold. The incentive is “production linked” — manufacturers only receive payments when they actually produce and sell qualifying products, not at the time of capital investment.

This structure was designed to:

• Build GW-scale domestic module manufacturing capacity
• Reduce India’s dependence on Chinese solar PV imports
• Develop an ecosystem for locally sourced raw materials, cells, and components
• Create direct and indirect employment in solar manufacturing

The scheme is implemented by MNRE and administered through IREDA (for Tranche-I) and SECI (for Tranche-II).

Tranche-I and Tranche-II: Key Numbers

PLI Tranche-I:

• Outlay: ₹4,500 crore
• Focus: Integrated manufacturers (polysilicon → wafer → cell → module)
• Implementing agency: IREDA

PLI Tranche-II:

• Outlay: ₹19,500 crore (with PLI amounts of ~₹13,937 crore allocated to 11 manufacturers)
• Target capacity: 39,600 MW allocated across 11 companies
• Implementing agency: SECI
• Key beneficiaries: Includes major Indian manufacturers pursuing large-scale capacity ramp-ups

Under Tranche-II, 15,400 MW of capacity was expected to become operational by April 2026 — making 2026 the year when PLI-driven capacity additions begin reaching meaningful commercial scale.

What PLI Has Achieved: The Manufacturing Transformation

The numbers tell a significant story. As of mid-2025, India’s solar manufacturing capacity had expanded to:

• 120 GW of module manufacturing capacity
• 29.3 GW of cell manufacturing capacity
• 5.3 GW of wafer capacity
• 3.3 GW of polysilicon capacity

Post-2022 additions alone represent 216% growth in module capacity and 344% growth in cell capacity — a transformation that was largely non-existent before PLI. However, independent assessments note that actual operational capacity remains below stated targets, with only about 56% of module targets and 14% of polysilicon targets achieved as of June 2025.

The cell capacity gap — India at 29 GW versus a target considerably higher — is where manufacturers like Websol play an important role. Solar cell manufacturing requires more sophisticated process control than module assembly, and long-operating manufacturers with proven lines hold a quality and reliability advantage.

How PLI Affects Module Pricing

This is the question most EPCs and developers care about most: does PLI make domestic modules cheaper?

The answer is nuanced.

Short term: PLI-backed manufacturers have invested heavily in new capacity. This investment, combined with scale ramp-up costs, means PLI-supported modules do not necessarily undercut imported (primarily Chinese) modules on a pure per-watt basis. Indian-manufactured modules still carry a slight price premium in most categories.

Medium term: As PLI-backed capacity reaches operational scale and supply chains localise further, per-watt costs of Indian-manufactured modules are expected to converge toward imported costs in several categories — particularly standard Mono PERC bifacial modules.

Policy-driven demand: The real pricing dynamic in India is not open-market competition — it is mandated procurement. With ALMM compliance now mandatory for all subsidised and government-funded projects, domestically manufactured modules have a captive market that does not need to compete on price against non-ALMM Chinese modules for government projects. This changes the economics of Indian manufacturing significantly.

PLI Efficiency Thresholds: What Qualifies

PLI incentives are tied to efficiency thresholds — manufacturers receive higher incentives for producing higher-efficiency modules. The current thresholds (which may be updated by MNRE) generally require:

• Module efficiency above a specified minimum (aligned with ALMM thresholds)
• Cells must meet corresponding efficiency benchmarks
• Full value chain integration (in Tranche-I’s fully integrated category) or module assembly from domestic cells

For cell manufacturers, this creates pressure to continuously improve cell efficiency — driving the Mono PERC to TOPCon technology transition and the push toward higher wattage formats like M10 and G12.

The Falta SEZ Advantage: West Bengal in India’s Solar Map

Websol Energy System operates its cell and module manufacturing at Falta Special Economic Zone in West Bengal — a location that provides structural advantages in India’s evolving solar supply chain.

Being within an SEZ provides:

• Customs duty exemptions on capital equipment and inputs
• Simplified export clearance for cells and modules destined for international markets
• Regulatory facilitation for manufacturing scale-up

As India’s solar manufacturing map expands under PLI, West Bengal’s Falta SEZ — with Websol as an anchor manufacturer — positions the state as a meaningful node in the eastern India solar supply chain. This is particularly relevant for EPC projects in West Bengal, Odisha, Jharkhand, and the northeastern states where logistics proximity matters.

Websol’s manufacturing facility produces M10 Bifacial Mono-PERC solar cells that supply module manufacturers across India, supporting both domestic project requirements and export demand.

What PLI Means for EPC Procurement in 2026

For Indian EPCs building their procurement strategies around PLI and ALMM frameworks, here are the practical implications:

Domestic supply security: PLI-backed Indian manufacturers are expanding capacity, reducing the risk of supply crunches driven by Chinese export policy changes or logistics disruptions that have affected global solar supply chains in recent years.

Quality verification: Not all PLI-listed manufacturers have the same operational track record. PLI listing confirms government approval for incentive support — it does not guarantee cell or module quality at every manufacturer. Cross-reference with ALMM listing, BIS certification, and third-party reliability testing data.

Pricing trajectory: Budget for Indian-manufactured modules at a modest premium over comparable imported products in 2026, with the expectation of price convergence over the next 2–3 years as PLI-backed scale matures.

Future proofing: As MNRE continues to tighten efficiency thresholds for ALMM and PLI eligibility, modules and cells at the bottom of the efficiency range may be delisted. Source from manufacturers investing in technology improvement — not just volume expansion.

The Road Ahead: PLI Beyond 2026

Industry observers and policy analysts note that PLI’s next challenge is the upstream gap — India’s polysilicon and wafer capacity remains far below cell and module capacity. As long as India imports the bulk of its polysilicon and wafers from China, true supply chain independence remains incomplete.

Future PLI iterations are expected to focus on:

• Deeper upstream integration (polysilicon, wafers)
• Higher efficiency thresholds aligned with TOPCon and HJT technology
• Longer policy tenures to support capital-intensive upstream investments

For solar cell manufacturers like Websol — positioned in the cell layer of the value chain — this evolution presents both opportunity (as domestic cell demand grows) and technology transition pressure (as efficiency thresholds rise).