Rethinking India’s solar strategy: Why solar thermal deserves a second look

India is celebrating its milestone of achieving half of the total electric power installed capacity (484.8 GW) from non-fossil fuel-based energy resources, as envisaged in the Nationally Determined Contributions (NDC) for 2030 under the Paris Agreement.

The majority of India’s non-fossil power comes from solar photovoltaic (SPV) systems with an installed capacity of 116.25 GW.

Solar energy can be harnessed mainly through the SPV route by converting sunlight directly to electricity via solar cells, and through the solar thermal (ST) route, collecting solar energy as heat, which can be utilised directly or converted into electricity.

However, cost-effectiveness, ease of deployment and policy support have put SPV systems at the forefront of India’s Net Zero agenda. The share of solar thermal technologies in India’s total installed solar capacity is only 0.28 per cent. Their contribution to the energy mix remains marginal, with an installed capacity of just 329.5 MW, of which only 101 MW is operational.

In India’s celebratory march, a critical question remains: Are we becoming too dependent on SPV while ignoring the promising potential of ST technologies?

Reliance on imports

There’s a need to evaluate the potential consequences of India’s extremely high dependence on SPV technology.

This is because the raw materials involved in manufacturing SPV panels such as polysilicon, ingot/wafer (the raw material used in solar cell manufacturing) and solar cells are mostly imported while other parts, such as aluminium frame, junction box/ wiring and encapsulant, are manufactured domestically.

In 2023-24, 56 per cent and 65 per cent of the total imports of solar cells and modules, respectively, were from China alone.

Even after achieving self-reliance in solar manufacturing, India’s huge dependence on the import of essential critical minerals to support its growth in the renewable energy sector is a big challenge.

Silicon, tellurium, indium and gallium are the essential critical minerals involved in the manufacturing of SPV systems. India imports 40 per cent of these minerals from China. Moreover, the country is 100 per cent import dependent for lithium, cobalt and nickel, which are used in electrochemical batteries.

Production gaps

Solar panels and solar cell manufacturing have gained traction in India over the last three-four years due to global geopolitical instabilities such as trade tensions and supply chain disruptions. The Government of India (GoI) has taken some necessary steps to achieve self-sufficiency in solar module manufacturing, such as the Approved List of Models and Manufacturers (ALMM), which includes the models and list of manufacturers eligible to be utilised in any government project, and the Production-linked Incentives (PLI), a GoI initiative that offers financial incentives to companies based on their increased domestic manufacturing output.

However, the current capacity of solar panels and solar cell manufacturing is 74 GW and 25 GW, respectively. This is insufficient to support the country’s future demands of 500 GW of non-fossil capacity by 2030 because not all facilities run at full capacity, solar modules wear out faster, need replacing, and cell production is limited to 25 GW.

End-of-Life waste disposal and critical mineral recovery

Another issue with the rise of PV installation is the large amount of solar waste generated. By 2030, India is expected to create approximately 600 kilotonnes of solar waste, a volume equivalent to 720 Olympic swimming pools.

As per India’s E-Waste (Management) Rules, 2022, solar PV manufacturers are required to manage the collection, secure storage and certified recycling of used panels under the Extended Producer Responsibility (EPR) framework. However, at present, only about 20 per cent of materials from discarded solar panels are officially recovered, while the remaining 80 per cent are often handled informally or dumped in landfills.

Discarded solar panels contain critical minerals like silicon, copper, cadmium and tellurium, whose recovery can support India’s mineral security. However, if not appropriately managed, toxic elements such as lead and cadmium can pollute soil and water, especially in remote and densely populated areas where solar projects are located.

The economic viability of solar panel recycling largely depends on recovering valuable metals, which make up only a small fraction of the panel’s weight, making the process less financially attractive.

Unsafe handling and disposal also pose serious health risks to workers involved in dismantling and recycling of solar panels. According to a World Health Organization report, a significant proportion of child labour, often as young as five years, is involved in India’s informal e-waste management sector. Therefore, responsible solar waste management is crucial at this time.

Missed opportunity

While solar thermal may not replace all the applications of solar PV, there are a few which can be better managed by using solar thermal.

Non-concentrating solar thermal collectors, in which the whole collector area captures sunlight without focus, can be utilised for low-temperature applications such as water heating.

However, concentrating solar power (CSP) systems, in which mirrors and lenses are used to concentrate sunlight on a small absorber area, are suitable for high-temperature applications such as power generation, institutional cooking and industrial process heating.

In India, industries consume 40 per cent of the final energy primarily in the form of heat, which comes from fossil fuels. Therefore, CSP can play a significant role in industrial decarbonisation. Regions such as Rajasthan and Gujarat have high solar irradiance (power of sunlight received per unit area on the earth’s surface). In such regions, CSP integrated with appropriate thermal energy storage (TES) technology can be a potential option for round-the-clock clean power generation. Independent solar energy collection and power generation loops make it a suitable power generation technology for hybrid power plants.

Integrating costly ($200–300/kWh) electrochemical batteries in large-scale SPV plants to prevent a drop in solar output due to changes in sunlight received on earth is economically unviable. In contrast, CSP coupled with TES offers a cost-effective alternative, enabling reliable and on-demand electricity generation.

Recently, the government planned to withdraw the Inter-State Transmission System charge waivers for solar PV projects. This will increase the cost of delivered SPV power, potentially affecting their competitiveness and large-scale deployment in India. Despite this, government support for solar thermal technologies remains limited compared to that for SPV technologies. The Ministry of New and Renewable Energy offers interest subsidies for solar water heaters, but there is minimal support for CSP.

India currently depends heavily on imports for evacuated tube collectors, a type of non-concentrating collector tube, primarily from China and Turkey. While there is comparatively lower import reliance on glass mirrors, India has domestic manufacturing capability for other components of solar thermal technologies such as structural frames, tracking mechanisms, piping, valves and pumps.

Although materials like glass, copper, aluminium and insulation used in solar thermal collectors are theoretically recyclable, the country currently lacks organised systems for formal recycling.

Diversification is key to security

India doesn’t need to choose between solar PV and solar thermal; it needs to embrace both strategically. The right technology can be deployed for the right need. Solar PV is ideal for electricity needs, while solar thermal can be utilised for both heat and electricity demand. A more balanced approach that includes both PV and solar thermal—backed by strong policy support, local manufacturing and waste management infrastructure—is essential to ensure energy security.

It is time to reverse this missed opportunity and start viewing solar thermal as an essential partner for India’s Net Zero growth.

Shubham Jain is a Research Associate at the Ashoka Centre for a People-centric Energy Transition.

Vaibhav Chowdhary is Director, Ashoka Centre for a People-centric Energy Transition.

Story edited by Piya Srinivasan, contributing editor, 360info and Namita Kohli, commissioning editor, 360info.

Originally published under Creative Commons by 360info™.