US new bill to impact Indian solar firms’ ‘Make In USA’ plan

The US Senate passed a bill with a massive rollback of clean energy programs will slow the rollout of clean energy in the US, including wind and solar generation, and this is expected to impact the Indian players exporting the photovoltaic (PV) modules to the country.

The export of Indian photovoltaic (PV) modules has risen exponentially by more than 23 times between Fiscal Year (FY) 2022 and FY2024, primarily to the US, which accounted for more than 97% of India’s exports in both FY2023 and FY2024, according to a report by IEEFA.

Indian PV manufacturers are increasingly focusing on the export market. Until FY2024, three of the largest domestic PV manufacturers – Waaree Energies, Adani Solar and Vikram Solar – accounted for most of India’s PV exports. Each company exported more than half of its annual actual production in FY2024.

Several other Indian PV manufacturers, like GREW Solar, ReNew Power, Navitas, Solex Energy, and Saatvik Energy, are pursuing export markets and setting up supply chains abroad. Waaree Energies and Vikram Solar are also planning to set up PV manufacturing capacities in the US, taking advantage of the incentives offered under the Inflation Reduction Act (IRA).

Under the new law, the IRA incentives are curtailed, and there are timelines to get tax credits. This bill now heads back to the House to reconcile changes before moving on to President Trump for final approval. It requires solar and wind energy projects to be placed in service by the end of 2027 to receive a tax credit or begin construction within one year of enactment, a difficult clause, keeping in mind long lead times needed to secure financing and permits, and connect to the power grid.

Richard Black, Director of Policy and Strategy at Ember, says there’s little doubt that the bill will slow the rollout of clean energy in the US, including wind and solar generation, electric vehicles, and advanced manufacturing.

“Analysis suggests it will also lead to hundreds of homegrown energy projects being cancelled. The bill is likely to have a chilling impact on clean energy investment and innovation, in which the US is already behind China. Chinese factories are still going to be producing the clean energy goods in increasing demand around the world, with Indian companies in fast pursuit; and while the US government has just decided that it won’t be a customer, it’s also decided not to be a competitor,” he said.