Skills shortage hobbles India's clean energy aspirations

India’s ambitious plan to expand domestic manufacturing is coming up short in the solar industry which is grappling with inadequate government funding and a skills shortage, potentially jeopardising its clean energy targets, industry leaders said.

Manufacturers of solar panels, cells, and storage batteries face significant hurdles. These challenges are raising costs and delaying projects. As a result, India’s ability to reduce its carbon footprint is under threat. Meeting international climate commitments has also become more difficult.

This highlights the challenges facing Prime Minister Narendra Modi’s “Make in India” programme. The initiative aims to strengthen 15 sectors, including renewable energy and electronics. Its goal is to transform India into a global manufacturing hub.

Modi’s government has imposed 40% tariffs on Chinese solar panels and 25% on cells, allocating about $3 billion in production-linked incentives for local manufacturers as part of a plan for net zero carbon emissions by 2070.

However, industry executives say India – the world’s third-largest emitter of greenhouse gases – must significantly step up funding and training programmes in the renewables sector to meet its goal of expanding non-fossil fuel capacity by 50 GW annually to 500 GW by 2030.

They caution that stronger government action is urgently needed. Without it, the broader manufacturing drive could face setbacks. The initiative has already involved nearly $24 billion in state incentives over five years. Additionally, around 20 billion rupees are allocated annually for upskilling and training.

Skills Shortages and Inadequate Training Programs

“A shortage of skilled manpower is a major problem,” said Dwipen Boruah. He is the managing director of GSES India, a renewables consultancy firm. The firm has trained over 7,000 people in renewable technologies. Boruah believes the government should significantly increase subsidies for education and training in the sector.

“Hundreds of private institutes exploit these subsidies but offer subpar training,” he said, adding that small subsidies – often just a few thousand rupees per student – hinder effective education.

Boruah and other industry executives note that while India produces over a million engineering graduates annually, traditional colleges are not equipped to teach solar, wind and other renewable technologies.

Some executives say the government’s current training budget of around 5-6 billion rupees should be ramped up by a factor of 10.

The ministry responsible for skills development didn’t respond to an email seeking comment.

Last week, Pralhad Joshi, India’s minister for renewable energy, announced the formation of a joint panel with industry representation to address key issues, including training, to meet clean energy targets.

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A 1.2 MILLION PROBLEM

The renewable industry currently faces a skill gap of around 1.2 million workers. Demand for skilled workers is expected to rise by 26%. By 2027, the industry will require 1.7 million skilled professionals. This data comes from TeamLease Services, a staffing company collaborating with industry and government on training programs.

“The skill gap spans all levels of industry,” said Ashwani Sehgal. He is the president of the Indian Solar Manufacturers Association. Moreover, the gap is particularly evident in emerging technologies like cell manufacturing, battery storage, and advanced grid integration.

“Industry is facing near 20% attrition of talented workers annually, posing a risk to production plans.“

Skilled Labor Shortage and Training Gaps

Earlier this year, the government proposed to step up support for upskilling and relax visa restrictions on Chinese technicians, after many firms said that costly imported machines were lying unused due to lack of skilled workers.

Vaishali Nigam Sinha is the co-founder of ReNew, one of India’s largest renewable firms. The company has nearly 10 GW of capacity. Sinha said the skills shortage is one of the most “underestimated barriers” to the clean energy transition.

“The lack of skilled engineers, technicians, and project managers is pushing up operational costs,” she said, a concern echoed by several industry executives.

This shortage comes as India speeds up plans for 35 GW of solar and wind capacity by March 2025, driven by a projected 7% annual increase in power demand.

Manufacturers say the skills gap could also limit India’s plans to expand solar module exports, touching $1.9 billion last fiscal year, mainly to the U.S. market.

Tata Power, with 6 GW of renewable capacity, has set up 11 training facilities, training 300,000 youth in solar installations, battery management, and other green technologies.

“A skilled workforce is essential for accelerating project deployment,” said Himal Tewari, who is the company’s chief human resources officer. “A skilled workforce is also crucial for ensuring efficient operations and maintenance.” Tewari added that it is key to driving technological innovation.

REMOTE CHALLENGE

In Greater Noida, a manufacturing hub on the outskirts of Delhi, companies are scrambling to hire new employees.

Job ads for solar design engineers, technicians, installers and sales managers are flooding job portals, with salaries ranging from 20,000 rupees to 100,000 rupees ($239 to $1200) per month.

Monica Sehgal, director of Alpex Solar said the company was offering incentives and overseas training in Taiwan and Vietnam to attract talent.

However, retaining workers at remote locations, particularly in Rajasthan and Gujarat, remains challenging as employees often prefer to work in bigger cities.

Kapil Sharma, a 19-years old technician, landed a job with a hefty salary hike at the Alpex factory, on the outskirts of Delhi, after working with a company in the remote Rajasthan desert.

“I had never seen a solar panel during my three-year electrical engineering course,” he said. “I received all training on the job,” he added while operating a panel manufacturing machine.

Sharma said a job in a panel factory offered higher pay than jobs in textile or auto factories. As a result, this allowed him to send 20,000 rupees a month back home.

“I am now waiting for an overseas training and higher increments.“

This news is sourced from Reuters and is intended for informational purposes only.