The US has spared Indian solar panels from the stiff tariffs it has imposed on a range of Indian goods, benefitting several Indian firms including Mundra Solar PV Ltd (MSPVL), a step-down subsidiary of Adani Enterprises Ltd making such panels at Mundra in Gujarat. Just three hours away by road, Adani Green Energy Ltd is building the world’s largest solar park of 30GW at Khavda, with China’s JinkoSolar and LONGi as its top solar panel suppliers.

Exporting panels from one company and importing them for the other helps the Adani Group make the most of the volatile global tariff scenario, as each business prioritizes what’s best for its shareholders.

While lucrative, this arbitrage is likely to be short-lived with India already clamping down on imported solar panels.

Adani’s strategy contrasts with other players like Tata Power and Waaree Energy, which utilize in-house panels for constructing their own solar power plants. A key notable difference is that the solar panel manufacturing business and the solar power plant business are housed within the same company in the case of Tata Power. Waaree’s captive solar power plants are not as expansive as Tata and Adani, as its key business is manufacturing panels.

High margin

Credit rating agency India Ratings upgraded MSPVL’s rating by a notch to Ind A+ in April. “Export sales have been yielding higher margins on account of robust demand, specifically from the US, which has disincentivized imports from China. As a result, India has become a key exporter of solar modules to the US,” a credit note from the rating agency said on 2 April.

India’s solar module exports to the US were priced about a fifth more than exports to other countries, S&P Platts noted on 1 July. About 80% of all solar exports from India head to the US. Meanwhile, companies in China’s Xinjiang region are the largest and most cost-effective solar cell producers in the world, according to S&P Platts.

MSPVL, which makes 2GW of TOPCon solar cells and modules a year – enough to power 2.5 million Indian homes – ships more than half of its production to the US. TOPCon stands for Tunnel Oxide Passivated Contact, which is the most popular solar cell technology today.

Powered by the high-margin exports, the company doubled its revenue in FY25 to ₹6,353 crore, while profit jumped over fivefold to ₹1,085 crore, as per its regulatory filings. Its Ebitda margin improved from 13.8% in FY24 to 27.3% in the first nine months of FY25, as per India Ratings.

Cheaper in China

The Adani Group has an end-to-end supply chain for solar across the two listed group companies. Two Adani Enterprises units manufacture solar cells and modules and Adani Green sets up large solar plants with such modules to generate electricity.

The trade between Adani Enterprises and Adani Green, or its absence, is in line with governance practices followed by other bluechip peers, where they do not give any preferential treatment to a fellow group company. Instead, maximum returns for the shareholders and diversification of the supply chain or customer base is prioritized.

“Transactions between Group companies are treated with the same rigour as those involving independent suppliers, ensuring transparent and fair dealings for all parties,” a spokesperson for Adani Green Energy said over email.

“Further, our procurement processes are aligned with good governance practices, and all transactions, whether within the group or third-party entities, are conducted on an arm’s length basis and with established price-competitive bid mechanisms.”

Several factors influence procurement decisions, the spokesperson further said, including project schedule, requirements, delivery timelines and availability.

Besides its large-scale projects, Adani’s in-house manufactured panels are also used for government initiatives such as the KUSUM (Kisan Urja Suraksha Evam Utthaan Mahabhiyan) and Surya Ghar scheme, which promote rooftop solar installations in households, the spokesperson pointed out.

Jinko, LONGi

Among Adani Green’s solar module suppliers for Khavda are at least six manufacturers other than fellow group company MSPVL. Jinko Solar is the largest supplier, accounting for almost 2.4 GW out of the existing 5.6 GW of installed capacity in Khavda, as per disclosures made by the two companies. China’s LONGi has supplied another 1.4 GW of modules. Other suppliers include China’s JA Solar and Astronergy, as well as domestic players Grew Solar and Goldi Solar.

However, the opportunity for the two companies is likely to be short-lived. On one hand, demand and prices of solar modules sold in the US may cool over the medium term as projects currently under construction become operational, Care Ratings noted in February. On the other, India has indirectly restricted the import of China-made solar modules by making it mandatory to use solar panels made by local companies for all government-linked projects – which form the bulk of solar demand in India. Only manufacturers part of the Approved List of Models and Manufacturers (ALMM) can supply solar panels to projects like Khavda, which would be supplying electricity to the national grid.

The restrictions are effective from April 2021, but were kept in abeyance in FY24 to address a shortage of domestic solar panels. Projects approved before April 2021 or during FY24 can utilize solar modules of any make, including Chinese. The government is also working on a second ALMM list for solar cells, which is expected to be effective from June 2026, which will make it mandatory for companies to use only domestically produced solar cells.

“Our solar module procurement adheres to and is fully compliant to the guidelines of the Approved List of Models and Manufacturers (ALMM). ALMM applies to projects for bids which were finalized after April 2021,” the Adani Green Energy spokesperson said. The company’s module sourcing includes a mix of both domestic and international players including Adani New Industries Limited and is fully compliant with the prevailing Indian regulations, tender requirements, and the policy framework, the spokesperson said. “We remain committed to transparency, regulatory compliance, and best governance practices in all aspects of our project execution and operations.”

We remain committed to transparency, regulatory compliance, and best governance practices in all aspects of our project execution and operations.

Demand outlook

Due to this, the domestic demand for solar modules in India continues to rise, and several manufacturers are now prioritizing local sales over exports, S&P Platts noted on 1 July. Considering this, MSPVL is likely to supply more to Adani Green and other Indian solar companies in the future.

A high-purity silicon block called ingot is the basic raw material for solar panels. This ingot is cut into thin strips called wafers, which are then processed into solar cells, which can convert sunlight into electricity. The wafers are then assembled into a solar module, also called a solar panel.

Interestingly, both MSPVL and Adani Green’s leading supplier JinkoSolar are battling First Solar of the US in an alleged patent-infringement lawsuit in a Delaware court.