With nearly 51% of India’s installed energy capacity now derived from non‑fossil fuel, primarily solar, sources, one would expect the reliance on coal to reduce, but data shows otherwise. In 2005–06, India’s coal and lignite consumption was 335 million tonnes; today, it has climbed to 1,270 million tonnes.India’s solar industry, often celebrated as the cornerstone of the country’s clean‑energy ambitions, is shaped by a complex interplay of policy challenges, manufacturing processes, subsidy rules and trade policies, yet these mechanisms often create distortions rather than stability.To expand the ambit of Atmanirbhar Bharat, as of June 1, 2026, the rules governing solar subsidies were tightened significantly. Under the revised framework, Domestic Content Requirement (DCR) panels, in which both cells and modules are 100% manufactured in India, are now mandatory for all subsidies and for eligibility under the Pradhan Mantri Surya Ghar scheme. In addition, qualifying panels must be listed on both the Approved List of Models and Manufacturers (ALMM): List‑I for modules and List‑II for cells.This new system has been imposed despite the fact that non‑DCR panels, for which cells are imported, typically from China or Malaysia, remain 12–18% cheaper and often deliver marginally higher efficiency due to access to advanced technologies such as TOPCon and HJT cells.Imported non‑DCR panels from tier‑1 brands typically range between Rs 13 and Rs 17 per watt. By contrast, DCR panels from approved domestic manufacturers such as Waaree, Adani or Vikram currently cost between Rs 23 and Rs 28 per watt. This increases system prices by about Rs 9,000 to Rs 11,000 per kW compared to imported (non-DCR) alternatives. This price differential especially affects the commercial and industrial segments.Before the launch of the DCR verification portal in 2024, manufacturers routinely imported Chinese cells, assembled them in India and sold them as DCR panels at premium rates. This prompted the United States to halt imports of Indian panels over suspected links to Chinese forced‑labour supply chains. The manufacturing process itself distinguishes between A‑Grade panels, which carry a 25‑year warranty, and B‑Grade panels, which contain faulty cells.The Ministry of New and Renewable Energy (MNRE) has no guidelines for scrapping or even marking B-Grade panels. So, manufacturers release them into the market at half-price, enabling engineering, procurement and construction contractors to earn hefty margins while leaving consumers with systems that start failing within a couple of years.Indian manufacturers largely follow a copy‑paste model – incrementally raising panel wattage, from 500W to 550W, 590W, 700W and so on – without contributing genuine technological breakthroughs. By contrast, China has pioneered scaling and industrialising half-cut solar cells combined with multi-busbar (MBB) technology that maintain output even when 40% of the panel is shaded.On June 25, China’s National Energy Administration announced that its installed power generation capacity has surpassed 4,000 GW, with storage capacity exceeding 144.7 GW. In sharp contrast, India’s solar sector continues to grapple with grid stability and capacity. By May 2026, India’s cumulative installed solar capacity had reached approximately 157.05 GW, yet its operational Battery Energy Storage System capacity stood at just over 1,082 MWh or roughly 1 GW.Between May and December 2025, India curtailed more than 2.3 terawatt‑hours of solar generation because excess midday power could not be efficiently absorbed. Although renewable energy enjoys “must‑run” status on paper, in practice, extensive curtailments are implemented during congestion.Policy contradictions compound the problem. The Production Linked Incentive (PLI) scheme incentivises domestic manufacturing, while tariffs and anti‑dumping duties inflate the price of Chinese imports. Despite these measures, imported cells remain cheaper than DCR panels. Subsidy benefits are meaningful for small systems (up to 5 kW), but for larger installations, the high cost of DCR panels erodes the subsidy’s value.In September 2025, the GST on solar cells was reduced from 12% to 5%, but simultaneously, a 30% anti‑dumping duty was imposed on panels from the People’s Republic of China. Consumers celebrated the 7% tax relief, yet in practice ended up paying 22–23% more, as the duty inflated base prices.The Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM‑KUSUM) scheme, launched to de-dieselise the farm sector, has also struggled to meet its ambitious targets across all three components. Component A, which envisages decentralised solar plants of 500 kW–2 MW on farmers’ land, has sanctioned 4,766 MW but installed only 209 MW, barely 4% of the target.Component B, aimed at deploying 14 lakh off‑grid solar pumps, has sanctioned nearly 13 lakh but installed just 3.5 lakh, leaving the majority unrealised. Component C, designed to solarise 35 lakh grid-connected pumps, has fared even worse: of 1.6 lakh sanctioned, only 2,644 have been installed, amounting to 28% of the sanctioned figure and under 1% of the overall target.State‑wise data reveals that in most regions the scheme has not even been initiated, underscoring a yawning gap between policy intent and execution.The MNRE cites land acquisition as a key reason for delays in setting up solar parks nationwide. But aside from the procedural hurdles, land acquisition has raised deeper social concerns. Solar farms have frequently failed to deliver a just transition for farmers who relinquish their land and traditional livelihoods but are left without viable alternatives.The government has pledged to achieve 500 GW of non‑fossil fuel capacity by 2030, with the Central Electricity Authority projecting a need for 47.2 GW of battery storage by 2032 to ensure reliable integration at scale. Yet the solar sector remains constrained by systemic flaws: manufacturers continue to offload defective panels, EPCs prioritise margins over quality and government policies oscillate between protectionism and loopholes.Most crucially, though, in the race to meet its ambitious renewable energy targets, India has yet to establish effective community benefit mechanisms for those displaced by solar projects. Bridging these gaps is essential if clean energy development is to balance climate imperatives with social equity, underpinned by stricter quality standards and stronger regulatory accountability.Vaishali Basu Sharma is a strategic and economic affairs analyst.