blog theme: Green industrial policy

India’s solar journey represents a compelling narrative of rapid deployment and ambitious targets with headlines celebrating milestones such as surpassing 100 GW of installed solar power capacity. However, behind these impressive numbers lies a structural vulnerability. Unlike China or the US, India’s solar research, development and demonstration (RD&D) base is still evolving and scaling. Public spending on RD&D remains modest, and most projects focus on small, incremental improvements, as we outline below. The result is a cycle where manufacturing relies heavily on imported technologies, leaving India vulnerable to shifts in global supply chains. India imports 56% of its solar cells and 65% of its modules, over 80% of which come from China. 

This raises a crucial question: can India break this cycle by balancing investment in frontier solar technologies that could shape the future, and by scaling up established technologies that already dominate the market? The answer will have lasting implications for India’s energy security, technological self-reliance, and global competitiveness.

Mapping India’s Public Solar RD&D Landscape

A look at the project mix shows India is placing its bets mostly on tried-and-tested technologies. As the visual suggests, India’s public RD&D portfolio is dominated by traditional crystalline silicon photovoltaic (PV)¹ technology, the current workhorse of the global solar industry. Institutions such as National Institute of Solar Energy (NISE) and the National Centre for Photovoltaic Research and Education (NCPRE) at IIT Bombay are actively conducting RD&D to increase the efficiency of silicon cells supported by the Ministry of New and Renewable Energy (MNRE). 

Perovskite cells² account for about 10% of projects, signalling some diversification into emerging areas. IIT Bombay and IIT Roorkee have recently developed silicon–perovskite tandem cells with 28% and 29.14% efficiency respectively well above the 20–22% efficiency typical of today’s crystalline silicon modules. The IIT‑Bombay incubated startup Art‑PV India has secured a $10 million MNRE grant to manufacture high-efficiency perovskite tandem solar cells, signalling a move toward commercialisation. Perovskites are attractive not just for their efficiency potential but also for their relatively low cost and flexibility, qualities that align with India’s long-standing emphasis on affordability in solar policy.

Encouragingly, India is also exploring areas gaining global traction in technologies such as floating solar PV³, which leverages the country’s vast network of reservoirs. Floating systems face unique design challenges, particularly around hydrodynamic performance – how panels and platforms withstand water movement, wind, and waves. Although the current focus is more on deployment than innovation, as India moves beyond pilot projects with NTPC commissioning over 200 MW of commercial floating PV, there remains considerable scope for further research in this area.

However, cutting-edge technologies such as TOPCon⁴, Heterojunction (HJT) cells⁵, and Building-Integrated Photovoltaics (BIPV)⁶ clubbed under the ‘other’ category in fig. 1 remain relatively underexplored within India’s RD&D ecosystem, despite gaining significant global momentum and attracting substantial investments in countries such as China, the US, and Germany. While India is pursuing some initial research in these areas, dedicated large-scale RD&D, prototyping, and commercialisation efforts are not yet focus areas.

Similarly, there are minimal RD&D projects in areas like Quantum Dot⁷ & Organic PV⁸ or CdTe Thin-Film⁹, which are seeing targeted investments globally for flexible, transparent, and specialised PV applications. Even in Concentrated Solar Power (CSP)¹⁰, India’s RD&D focus has not shifted towards the hybrid models and next-generation technologies being pursued by global leaders. Whether these reflect strategic choices to avoid competing head-on in crowded areas, or the absence of coordinated prioritisation or availability of necessary skills and technical  know-how to do research in these technologies remains an open question, but it highlights the need for greater clarity in defining India’s solar RD&D priorities.

Strategic Dilemma: Align or Diverge?

A robust public RD&D ecosystem is crucial if India wants to reduce dependency on other countries while also capturing the economic opportunities and strategic advantages that come with innovation. Public investments are especially crucial in sectors like clean energy where private investment tends to limit its focus on near-commercial technologies that can be scaled, and long-horizon, high-risk innovation relies heavily on public funding. 

But beyond individual technologies, India faces a broader set of strategic questions: 

– Should it align more closely with global RD&D trajectories in solar technologies or are there strategic advantages to selective misalignment and funding diversion? 

– Should it seek to catch up on technologies already at advanced Technology Readiness Levels (TRL) and Market Readiness Levels (MRL) elsewhere, or concentrate its limited resources on areas where it can carve out leadership? 

As Figure 2 shows, nearly most public RD&D funding is directed towards incremental innovation, with only about one-third flowing into development of radical next-gen technologies. This tilt toward refining existing technologies raises deeper questions about whether such a tilt is optimal for the long term and what trade-offs it creates for technological self-reliance, competitiveness, and the ability to shape future solar technologies. 

On the one hand, alignment with global RD&D offers several benefits. It reduces the risk of technological irrelevance and allows India to capitalise on global breakthroughs by adapting them to Indian conditions many of which, like perovskite-silicon tandems, are sensitive to heat, humidity, and material interfaces, and thus require local RD&D for testing, durability optimisation, and eventual deployment. Alignment can also boost India’s position in global value chains and bolster global competitiveness, attract international capital and fast track entry into emerging markets. Countries like China and the US have leveraged this model to rapidly scale technologies through coordinated public-private RD&D and commercial deployment. For India, alignment would involve investing more in established innovation pathways, adapting them to local conditions, and pursuing technology cooperation and co-development to strengthen domestic capacity.

On the other hand, full alignment may carry hidden risks and sovereignty costs. From a technology sovereignty perspective, over reliance on foreign innovation can entrench dependency on imported intellectual property, materials, and manufacturing equipment. This is particularly problematic in a geopolitically volatile and protectionist world where technological control is increasingly tied to economic and strategic power. Moreover, late entry into areas where global leaders such as China already dominate, could lead to diminishing returns on investment, little domestic IP creation and the inability to leapfrog. Instead, India might do better to leapfrog into underexplored or emerging areas where global consensus is less settled, such as hybrid CSP-PV systems tailored for India’s thermal-rich grid context. 

The Way Forward 

India would benefit from an solar RD&D strategy that balances alignment with global trends and selective divergence, reflecting comparative strengths such as a cost-competitive manufacturing base, diverse climatic zones for technology testing, and experience in off-grid deployment models. Current funding mechanisms are often fragmented, and early-stage academic research, with limited funding for prototypes, pilots and testing, and industry co-leadership hinders technology progression from the lab to the market. The recently announced Rs 1 lakh crore Research, Development and Innovation (RDI) Scheme offers an opportunity to address some of these weaknesses if directed towards higher-TRL solar innovation and bridging the academia-industry gap. 

India’s clean energy future cannot solely rely on the deployment of imported technologies. While rapid installation is commendable, true long-term competitiveness and energy sovereignty demand a parallel commitment to indigenous innovation. India doesn’t need to lead in every single aspect of solar technology, but it must strategically choose areas where it can build expertise, drive innovation, and ultimately, design its solar future.

Footnotes

1. Crystalline silicon photovoltaic (PV) refers to solar cells made from crystalline silicon, a semiconductor material, that converts sunlight into electricity through the photovoltaic effect. ↩︎
2. A perovskite solar cell is a type of solar cell that employs a metal halide perovskite compound as a light absorber. They offer high potential for efficiency, low-cost production, and flexibility but currently face challenges with stability and lead toxicity. ↩︎
3. Floating PV systems are mounted on a structure that floats on a water surface and can be associated with existing grid connections, for instance in the case of dam vicinity. ↩︎
4. TOPCon stands for Tunnel Oxide Passivated Contact. It’s a type of solar cell technology that improves efficiency by using a thin, tunnel-shaped oxide layer to reduce charge carrier recombination and enhance carrier selectivity. This results in higher power output compared to traditional solar cells. ↩︎
5. Heterojunction (HJT) solar cells, also known as Silicon Heterojunction (SHJ) cells, are a type of solar cell that combines the advantages of crystalline silicon (c-Si) and thin-film technologies. ↩︎
6. Building-integrated photovoltaics (BIPV) refers to the integration of photovoltaic (PV) solar technology into the building’s structure, effectively replacing traditional building materials like roofing or siding. BIPV serves a dual purpose: generating electricity while also fulfilling a structural function as part of the building envelope. ↩︎
7. A quantum dot solar cell is mainly the type of cell design which makes use of quantum dots as the key absorbing photovoltaic material. ↩︎
8. Organic photovoltaics (OPV), also known as organic solar cells, are a type of solar cell that utilises organic materials, specifically polymers or small molecules, to convert sunlight into electricity. Unlike traditional silicon-based solar cells, OPVs are known for their flexibility, light weight, and potential for low-cost manufacturing. ↩︎
9. A CdTe (Cadmium Telluride) thin-film solar cell is a type of photovoltaic (PV) device that uses a thin layer of cadmium telluride as the light-absorbing material to convert sunlight into electricity. It is a thin-film solar technology because the active layer (CdTe) is very thin, typically a few microns thick, compared to traditional silicon solar cells. ↩︎
10. Concentrated Solar Power (CSP) is a renewable energy technology that generates electricity by using mirrors or lenses to concentrate a large area of sunlight onto a small receiver. ↩︎

We would also like to thank Mayank Munjal for his help in designing the visuals featured in this piece.

The Union Cabinet’s recent approval of the ₹1 lakh crore Research, Development, and Innovation (RDI) Scheme marks a potentially transformative moment for India’s technology and industrial policy. Overseen by the Anusandhan National Research Foundation (ANRF), under the Department of Science and Technology (DST), the scheme aims to catalyse private sector investment in sunrise sectors such as clean energy, climate-tech, deep-tech, and artificial intelligence (AI). If strategically implemented, it could fill a long-standing gap in India’s clean energy innovation ecosystem and help position the country as one of the major technology leaders over the coming decades by providing patient capital for emerging technologies.

Investing in clean energy research and development (R&D) is not only central to achieving technological self-reliance under the 2047 Viksit Bharat vision, but a lever to capturing the industrial and economic gains of the global energy transition. As countries ramp up their energy transition efforts, emerging technologies such as green hydrogen, advanced batteries, and next-gen solar are becoming the foundations of new industrial value chains. The IEA estimates that clean energy technology manufacturing could generate a global market worth over $650 billion annually by 2030, over three times current levels.

India’s green industrial ambitions, reflected in flagship schemes like the Production Linked Incentives (PLI) for solar and batteries, and the National Green Hydrogen Mission, often depend on technologies that are either imported or underdeveloped domestically, exposing a gap between manufacturing goals and technological capabilities. This disconnect weakens India’s competitiveness and increases vulnerability to shifting global priorities and geopolitical uncertainties, thus reinforcing the urgency of aligning industrial policy with a coherent innovation strategy.

India’s Innovation Funding Gap in Clean Energy

Though there is growing recognition that R&D is essential to building a robust manufacturing ecosystem, India has historically underinvested in R&D relative to its peers. India’s overall R&D expenditure is approximately 0.64% of GDP, well below global leaders such as China (2.4%) and the United States (3.5%) in 2020-21. This gap is even bigger when seen in absolute terms; in 2021, the United States spent $828 billion on R&D and China $427 billion, while India’s estimated spending was $17-18 billion. Moreover, public investment is concentrated in academic institutions, typically with weak industry linkages and limited translation to demonstration, commercialisation, and scale diffusion.

SFC’s ongoing review of publicly-funded clean energy R&D projects indicates that such funding predominantly flows towards incremental improvements in mature technologies such as crystalline silicon solar cells and lithium-ion batteries. While incremental R&D is necessary, its impact is limited when disconnected from industry needs and market deployment. At the same time, support for emerging technologies such as perovskite photovoltaics, redox flow batteries, and solid-state storage is still at a nascent stage.

Also stark is the absence of private industrial R&D, which accounts for less than 40% of R&D spending in India, compared to over 71% in the United States, 76% in South Korea, and 70% in China. Private R&D plays a pivotal role in translating early-stage discoveries into commercially viable technologies. However, climate-focused ventures continue to face acute and worsening challenges in capital intensity, infrastructure, and scale, leading to private investments in climate tech falling from US$3.4 billion in 2023 to just US$1.3 billion in 2024. Most ventures struggle to move beyond the early stages, as energy and climate tech solutions often require significant upfront investment, highlighting the need for policy interventions such as the RDI to de-risk capital.

These gaps in public and private R&D funding are mutually-reinforcing; when public funding remains focused on incremental projects without clear commercial pathways, and private capital avoids early-stage risk, promising technologies struggle to advance. The RDI Scheme is a necessary step in the right direction to overcome this. While there is a need to increase funding at all stages, by targeting the underfunded mid-to-late stages of the innovation process and incentivising private sector participation, it can help strengthen the overall pipeline and improve coordination between research and industrial deployment.

What Strategic R&D could look like

To enhance the effectiveness of the RDI Scheme and ensure it delivers on its intended goals, the following actions may be worth considering:

1) Targeted prioritisation of technologies:

RDI funding  should focus on a targeted set of high-impact, context-relevant technologies  where early support can de-risk innovation and attract private investment for commercial scale-up. Prioritisation should reflect where public and private R&D can most effectively complement each other.

2) Develop technology foresight and sectoral roadmaps:

To avoid reactive or fragmented investments, India must embed strategic foresight into the RDI Scheme. The ANRF and DST can commission regularly updated roadmaps across different technologies to help identify priority areas, anticipate technology shifts, align R&D pipelines with industrial goals, and periodically review progress.

3) Define success through commercialisation: 

Outcomes must be tracked using indicators such as number of pilots deployed, technologies reaching Technology Readiness Level (TRL) 8–9, public-private co-investments, and patent-to-product conversion. Academic output alone is not a sufficient performance metric for high-TRL innovation finance.

The RDI Scheme is an opportunity to build the foundation for a globally competitive, low-carbon economy. But its success will depend on strategic clarity, capable institutions, and a clear link between innovation and deployment. If done right, it can help shift India from a technology importer to a clean-tech leader.