Why Solar-Based Industry is a Hot Opportunity for MSMEs in the Next 5 Years

Introduction: A Business of the Future, Today

The global energy conversation is shifting rapidly. With rising energy costs, climate change concerns, and policy mandates for clean energy, solar-based industries are emerging as a critical and profitable opportunity — especially for Micro, Small, and Medium Enterprises (MSMEs). Whether you’re a budding entrepreneur or an MSME looking to diversify, solar-based manufacturing offers a path that aligns with sustainability, innovation, and long-term profitability.

Solar energy is no longer a fringe technology — it’s fast becoming central to infrastructure, agriculture, mobility, and industry. India alone has set a target of 500 GW of non-fossil fuel capacity by 2030, and solar is expected to contribute more than 60% of this. That means increasing demand for everything from solar panels to ancillary components like inverters, batteries, and mounting systems — and MSMEs can play a vital role in manufacturing these components locally.

This article aims to break down the solar-based manufacturing opportunity: what it entails, why it’s gaining traction, and how you can tap into this evolving industry as an MSME.

Industry Overview (Solar-Based Manufacturing)

Solar-based manufacturing is all about making the parts and systems that help turn sunlight into usable electricity. This industry doesn’t just focus on solar panels — it covers a wide range of products that work together to generate, store, and use solar power. It’s one of the most promising areas for manufacturing businesses today, especially for small and medium enterprises.

This sector includes:

• Photovoltaic (PV) cells and modules
• Solar inverters
• Mounting structures
• Solar batteries and storage systems
• Solar-powered appliances such as pumps, street lights, and fans
• Charge controllers and converters

Let’s break down what each involves and why they’re important.

Photovoltaic (PV) Cells and Modules

These are the heart of any solar power system. PV cells are made using special materials like silicon that can absorb sunlight and turn it into electricity. These cells are combined into larger panels, called modules, which are then installed on rooftops or open land. The production process includes cutting raw silicon, treating it to improve performance, assembling the cells, and adding glass, frames, and wiring.

While making PV modules from scratch requires a larger setup and high investment, there are still smaller roles in this process that can be taken up by local businesses — like assembling panels from imported or pre-made cells.

Solar Inverters

Inverters are needed because the power generated by solar panels is in direct current (DC), while most homes and businesses use alternating current (AC). Inverter manufacturing involves assembling electronic parts, wiring, and testing systems to make sure the conversion from DC to AC is safe and reliable.

This area is more suitable for MSMEs because it doesn’t require extremely large factories or expensive materials. As solar use increases in homes, farms, and offices, the demand for good-quality, affordable inverters is rising fast.

Mounting Structures

Mounting structures are metal frames or supports that hold solar panels in place. These need to be strong, weather-resistant, and easy to install. They’re often made from aluminum or galvanized steel. Manufacturing these structures includes cutting, welding, shaping, and coating the metal parts.

This is a great area for MSMEs because it needs basic fabrication machinery and raw materials that are easily available locally. Plus, demand is steady, especially in rural and semi-urban areas where rooftop installations are growing.

Solar Batteries and Energy Storage Systems

Batteries are used to store the power generated by solar panels for later use — especially when the sun isn’t shining. These storage systems can range from small battery packs for homes to large setups for commercial sites.

Manufacturing batteries involves assembling battery cells, fitting battery management systems (BMS), enclosing the unit safely, and running safety tests. Businesses can either build full batteries or focus on assembling packs from pre-made cells. The demand for storage is rising because people want to use solar power even at night or during power cuts.

Solar-Powered Appliances

Many useful products are now available that run directly on solar power — like water pumps, street lights, fans, lanterns, and mobile chargers. These combine solar panels, batteries, small motors, and electronics into one compact system.

This is a good space for small manufacturers because you can start with one or two products and expand slowly. It also fits well in rural areas, where people often need affordable and reliable power solutions. Schools, farms, local shops, and housing projects all use solar-powered tools now.

Charge Controllers and Converters

These parts help manage how electricity flows between the solar panel, the battery, and the appliances. They make sure batteries don’t get overcharged or fully drained and help extend the life of the system. Manufacturing these requires some electronics knowledge and access to circuit components.

For small businesses with basic electronics assembly experience, this can be a manageable and growing segment. As more people install off-grid solar systems, these components are in high demand.

Why This Industry Is a Good Fit for MSMEs

One of the best things about the solar manufacturing sector is that it offers many options depending on your budget, skills, and location. Some parts of the process need large factories and high-end technology, but many others can be done in small workshops or assembly units.

Product Category	What It Involves	Why It’s Suitable for MSMEs
PV modules/cells	Silicon processing and panel assembly	High capex, suited for larger players
Inverter assembly	Electronics and PCB manufacturing	Moderate capex, growing demand
Mounting structures	Steel framing, assembly	Low capex, local sourcing possible
Battery packs	Cell assembly + BMS + testing	Moderate capex, rising demand
Solar appliances	Integration of modules, inverters, motors, etc.	Lower capex, suitable for local markets
Charge controllers/controllers	Power electronics inside solar setups	Tech-driven, multiple small-scale use cases

For example:

• If you’re just starting out, you might focus on solar-powered lights or fans, which need basic tools and wiring skills.
• If you have access to a workshop, fabricating mounting structures could be a steady and low-risk business.
• With some electronics experience, assembling inverters or charge controllers could bring in good margins.

Overall, the solar industry isn’t limited to big companies. There’s plenty of room for smaller businesses to grow by picking the right products, building quality, and serving local needs.

Key Manufacturing Processes in Solar-Based Industry

Each solar product has its own step-by-step process, depending on what it’s used for. These processes vary in terms of cost, skills required, and setup needs. Some need technical knowledge, while others can be started with basic machinery and simple assembly work.

PV Module Manufacturing

Making a solar panel starts with special materials that can catch sunlight — usually a type of treated silicon. This silicon is sliced into thin pieces, called wafers, which are then turned into solar cells.

These cells are lined up, connected with wires, and placed between protective glass sheets. Then they’re sealed using a special laminating machine and fitted into an aluminum frame. The final step includes testing how well the panel works in different conditions.

This type of manufacturing is usually done by larger businesses because it needs a lot of investment, clean rooms, and trained staff. However, MSMEs can still take part by assembling panels using already-made cells, which requires less capital and space.

Solar Inverter Assembly

Solar panels create power in direct current (DC), but homes and factories use alternating current (AC). That’s where inverters come in — they convert DC into usable AC power.

Assembling inverters involves placing small electronic parts on printed boards (called PCBs), installing software or firmware, and enclosing everything in a safe housing. There’s also a testing phase where voltage, safety, and performance are checked.

Inverter manufacturing is a great option for small businesses. It doesn’t need very expensive tools, and the parts are widely available in the market. As rooftop solar systems grow, so does the need for good-quality inverters.

Battery Pack Manufacturing

Solar power can’t be used when the sun goes down — unless it’s stored in a battery. That’s why batteries are a growing part of the solar value chain.

Battery pack manufacturing means putting together individual cells, adding a safety system called a Battery Management System (BMS), and placing them in strong enclosures. These packs are tested for how long they hold power, how fast they charge, and whether they overheat.

Small businesses often focus on assembling the packs using ready-made cells rather than building the cells themselves. This makes it more affordable and manageable. The increasing use of solar at homes, farms, and commercial sites makes battery assembly a growing opportunity.

Solar Appliance Manufacturing

This includes making things like solar fans, lights, pumps, and street lamps. These products combine basic solar panels, a small battery, a motor or light, and a few switches or wires.

Manufacturing these appliances involves collecting all the parts, putting them together inside a casing, and testing to make sure they work well. Some products also need waterproofing or dustproofing.

This area is very suitable for MSMEs, especially in areas where power cuts are common or where people are looking for affordable off-grid solutions. Solar-powered appliances have strong demand in rural markets, schools, hospitals, and government programs.

Mounting Structure Fabrication

Mounting structures are the metal frames that hold the panels in place — either on rooftops or on the ground. These structures are usually made from steel or aluminum.

The process includes cutting the metal into specific shapes, drilling holes, welding where needed, and applying a rust-resistant coating. Once ready, they are packed and sent to installation sites.

This process doesn’t need high-tech machines. With basic metalworking tools and a small workshop, local businesses can supply to installers or project contractors.

Repair, Testing, and Recycling Services

Apart from manufacturing, there’s also strong demand for services like testing panels, repairing broken parts, and recycling used batteries or panels. These services are needed during and after installation, and they help build long-term customer relationships.

For example:

• A solar panel may need testing if it’s not producing enough power.
• An inverter may need repair if it stops working.
• Old batteries may need safe disposal or reuse.

These support services don’t require large setups, and they create steady work for small businesses.

What Makes This Industry Flexible for MSMEs

Solar manufacturing is not one single business — it’s a group of many activities. You don’t need to do everything. You can pick what suits your budget, location, or skills.

• If you have electronics knowledge, inverter or battery assembly can be a good fit.
• If you work with metal or have a small workshop, mounting structure fabrication is a steady option.
• If you want to start small, solar lights or fans are easy to make and sell.
• If you want to offer services, repairs and testing are always in demand.

Product Type	Manufacturing Steps	Why it Works for MSMEs
PV Modules	Wafer → Cell → Panel assembly → Testing	High capex, good for exports
Inverters	PCB assembly → Housing → Testing	Moderate capex, strong demand
Batteries & Storage	Cell assembly → BMS setup → Safety testing	Growing need; assemble or integrate
Solar Appliances	Combine panel + motor + battery + controls	Lower setup cost; local appeal
Mounting Frames	Fabricate, weld, coat metal parts	Simple tools, steady demand
Services & Recycling	Repair, testing, recycling of panels and systems	Expands customer reach and revenue

Each step — from making panels to assembling appliances — plays an important role in the bigger solar ecosystem. And as solar usage continues to grow, MSMEs have a great chance to be part of this change.

Current Market Demand & Trends (By Region)

India

India has become one of the fastest-growing markets for solar energy. More homes, factories, and farms are now using solar power to lower electricity bills and reduce dependence on unreliable grids. From cities to small towns, solar panels are being installed on rooftops, open lands, and public buildings.

What’s even more promising is the shift towards local manufacturing. The Indian government is actively encouraging businesses to make solar equipment within the country. Financial incentives, subsidies, and tax benefits are available to manufacturers who want to produce solar panels, inverters, batteries, and other parts.

This push is not just limited to big cities. Many smaller cities in states like Gujarat, Rajasthan, Maharashtra, and Tamil Nadu are quickly becoming hubs for solar manufacturing. These areas offer land at reasonable rates, have growing industrial zones, and often provide support through state-level policies.

The need for solar equipment is also rising in rural areas. Farmers are using solar-powered pumps and dryers, while village homes are opting for solar lights and fans. As the demand spreads across the country, there’s a growing need for reliable, affordable, and locally made solar products.

Global Trends

Across the world, solar energy is gaining popularity at a faster pace than ever before. Countries with high power costs or strong clean energy targets are turning to solar to meet their needs. Here’s how things are shaping up globally:

• United States: There is growing demand for rooftop solar and battery storage systems, especially in states where electricity prices are rising. Businesses and households are both investing in solar setups.
• Germany: Known for its early adoption of renewable energy, Germany continues to upgrade its solar infrastructure. The focus now is not just on adding panels but also on improving energy storage and smart grid systems.
• United Arab Emirates (UAE): The region has large-scale solar farms and is investing heavily in solar technology. With plenty of sunlight and a strong push for clean energy, demand for efficient solar equipment remains high.
• Africa: Many countries in Africa face power shortages and unreliable electricity. Solar is seen as a practical solution, especially in off-grid or remote areas. Products like solar lamps, mini-grids, and water pumps are in great demand here.
• Southeast Asia: Countries like Vietnam, Indonesia, and the Philippines are increasing their focus on solar energy to cut down on fuel imports. Local demand for affordable solar products is growing quickly, especially in rural and island regions.

This global demand creates a solid chance for small and mid-sized businesses in India to grow. Many of the products that are needed overseas — like solar inverters, storage batteries, and mounting systems — can be manufactured in India at a competitive cost. These products don’t always need large factories and can be made with a moderate investment, making them ideal for MSMEs.

If businesses can meet quality standards and ensure timely delivery, they can tap into export markets across Asia-Pacific, Africa, and the Middle East. These regions prefer cost-effective and easy-to-install products, which Indian manufacturers are well-positioned to offer.

At the same time, demand within India is also expanding — so MSMEs have the advantage of serving both local and global markets, depending on their strategy and capacity.

Common Applications & End-Use Sectors

Solar energy is no longer limited to large-scale power plants. Its integration across sectors is expanding, creating demand for various solar-based products:

• Agriculture: Solar water pumps, dryers, and cold storage units are transforming how small and marginal farmers manage energy needs.
• Commercial & Industrial: Manufacturing plants, malls, and IT parks are adopting rooftop solar for power cost reduction.
• Residential: Urban and rural homes are increasingly installing solar lights, fans, heaters, and power systems, aided by subsidies.
• Public Infrastructure: Government buildings, smart cities, and rural electrification projects are major buyers of solar streetlights and mini-grids.
• Mobility: Solar-powered EV charging stations and public transport lighting systems are gaining momentum.

Each of these verticals presents unique business niches for MSMEs to explore — especially in custom product development and local supply.

Machinery & Technology Requirements

Starting a solar-based manufacturing business requires careful planning, especially when it comes to choosing what product you want to make. The type of equipment, raw materials, and setup needs can vary depending on the specific segment—whether it’s solar panels, inverters, batteries, or solar appliances.

Each product line has its own set of machines and tools. Here’s how the setup typically looks based on what you choose to manufacture:

• Solar Panel Manufacturing: This setup needs a laminator to seal layers, a tabber-stringer to connect solar cells, framing machines to fit the structure, and an EL (electroluminescence) tester to check for quality. It’s more equipment-heavy but gives higher returns when scaled properly.
• Solar Inverter Assembly: If you’re assembling inverters, you’ll need printed circuit board (PCB) printers, soldering tools, testing kits for microcontrollers, and a quality-check station. It’s a great option for MSMEs because it doesn’t need huge space or high electricity usage.
• Battery Pack Assembly: This involves machines for welding battery cells, testing the battery management system (BMS), and safety-checking equipment. Lithium-ion batteries are popular, but lead-acid variants are also used in rural areas where cost matters more.
• Solar Appliance Assembly: If you’re building products like solar-powered fans or lights, you’ll need tools for fitting motors, machines for shaping plastic or metal enclosures, and testers for performance. This type of business often suits small units in semi-urban or industrial clusters.

Type of Unit	Key Machinery / Tools Required
Solar Panel Unit	Laminator, tabber-stringer, solar cell cutter, framing machine, glass washing unit, EL tester
Inverter Assembly Unit	PCB printer, soldering station, microcontroller testing kits, oscilloscope, casing tools
Battery Pack Unit	Spot welding machine, BMS tester, voltage and thermal scanner, charging-discharging station
Solar Appliance Unit	Motor mounting kit, plastic/metal molding machine, LED testing tools, wire harness equipment
Charge Controller Unit	SMT (Surface Mount Technology) line, functional testing jig, transformer winding machine
Storage & Packaging	Shrink wrap machines, bubble wrap stations, pallet trolleys, barcode printers
Quality Testing Lab	IV tester, insulation resistance tester, high-voltage tester, vibration and durability testing rigs

The machinery can be sourced domestically from growing industrial suppliers in cities like Pune, Noida, Ahmedabad, and Bengaluru, which now cater to solar startups and MSMEs.

Investment Range

This section is designed to guide aspiring entrepreneurs and MSMEs who are exploring solar manufacturing as a business opportunity. It covers not just the investment range but also what goes into the setup, the kind of products made, and who this setup is most suitable for.

The cost to set up a unit depends on the scale and complexity of your product:

1. Solar Appliance Unit (₹10 lakh – ₹25 lakh)

This setup focuses on manufacturing small solar-powered devices like LED lights, table fans, garden lamps, mobile chargers, and street lights. It’s a great entry-level business for those with limited capital and space. Most of these appliances are assembled from pre-supplied components such as small solar panels, DC motors, batteries, and LED modules.

Ideal for: First-time entrepreneurs, rural or semi-urban setups, women-led enterprises, and local supply businesses.

Key Requirements:

• Small-scale tools like motor fitting stations, soldering tools, testing kits.
• Easily available raw materials like plastic enclosures, LEDs, solar panels, and switches.
• Basic training in assembly and quality checks.

Profit Potential: Medium to high depending on volumes, especially if you secure institutional orders (panchayats, NGOs, rural electrification programs).

2. Inverter Assembly Unit (₹25 lakh – ₹50 lakh)

This involves assembling solar inverters used in residential, commercial, and small industrial solar systems. Since inverters are a critical part of any solar setup, demand is stable and growing. MSMEs can import PCB boards or design them locally, and focus on smart inverter assembly and packaging.

Ideal for: Entrepreneurs with some background in electronics or small tech businesses looking to expand into renewable energy.

Key Requirements:

• Soldering units, PCB printing equipment, casing tools, and testing stations.
• Raw materials like microcontrollers, capacitors, relays, and PCBs.
• Space of 1,000–1,500 sq. ft. in an industrial or semi-industrial zone.

Profit Potential: Moderate to high; consistent demand both in domestic market and export-friendly regions like Southeast Asia and Africa.

3. Battery Pack Unit (₹30 lakh – ₹75 lakh)

Battery units focus on assembling and testing lithium-ion or lead-acid batteries, which are essential for storing solar energy. This is a slightly more specialized business due to safety and compliance requirements, but demand is surging with the growth in EVs and solar power backup systems.

Ideal for: MSMEs with experience in electronics, power solutions, or automotive components.

Key Requirements:

• Spot welding machines, BMS testers, charging-discharging stations.
• Raw materials like battery cells, battery management systems (BMS), connectors, and casing.
• Compliance with pollution control norms and safety standards.

Profit Potential: High, especially if the business supplies to EV charging stations, solar installers, or rural micro-grids.

4. Charge Controller Unit (₹20 lakh – ₹40 lakh)

Charge controllers help regulate the flow of energy between solar panels and batteries, preventing overcharging or deep discharge. They are essential in standalone solar systems like street lights and home setups.

Ideal for: MSMEs with a focus on power electronics, particularly in regions with decentralized solar installations.

Key Requirements:

• SMT line for PCB mounting, transformers, testers, basic soldering tools.
• Components such as resistors, diodes, capacitors, and microprocessors.
• Compact workshop (around 1,000 sq. ft.) and basic electronics assembly skills.

Profit Potential: Moderate; strong domestic demand and good opportunities in export-driven markets.

5. Solar Panel Assembly Unit (₹1 crore – ₹5 crore+)

This is a large-scale manufacturing setup where photovoltaic (PV) cells are assembled into complete solar panels. The process involves multiple stages like cell stringing, lamination, framing, testing, and packaging. It requires precision, capital, and compliance with international standards.

Ideal for: Experienced industrialists, engineering graduates, or business groups looking for long-term investment and export-oriented operations.

Key Requirements:

• High-capacity laminators, EL testers, tabber-stringer machines, framing units, and cleaning stations.
• Raw materials like solar-grade silicon, EVA sheets, toughened glass, and junction boxes.
• Spacious industrial shed (5,000+ sq. ft.), trained technicians, and BIS certification.

Profit Potential: High; especially when supplying to government projects, large EPC contractors, and solar parks.

6. Multi-Product Setup (₹2 crore – ₹8 crore+)

This is a vertically integrated business where you manufacture a combination of solar components — for example, modules, batteries, and inverters — under one roof. While the capital requirement is higher, it offers economies of scale, greater brand control, and the flexibility to cater to different customer segments.

Ideal for: Existing manufacturers diversifying into solar, investor-backed startups, or those targeting both domestic and export markets.

Key Requirements:

• Mixed machinery set based on product line, larger team size, strong backend systems for inventory, compliance, and dispatch.
• High working capital and good supply chain management.
• Better suited to industrial zones or near SEZs for export focus.

Profit Potential: Very high with proper market positioning and brand development.

Type of Unit	Estimated Investment Range
Solar Appliance Unit	₹10 lakh – ₹25 lakh
Inverter Assembly Unit	₹25 lakh – ₹50 lakh
Battery Pack Unit	₹30 lakh – ₹75 lakh
Charge Controller Unit	₹20 lakh – ₹40 lakh
Solar Panel Assembly Unit	₹1 crore – ₹5 crore+
Multi-product Setup	₹2 crore – ₹8 crore+ (depending on scale)

If you’re starting fresh, it’s advisable to begin with a niche product like solar lamps or charge controllers, then expand gradually. Look for areas where demand is strong but supply is scattered — such as rural electrification, farm-level solar use, or school/street lighting.

Also, tap into schemes like PM-KUSUM (for solar pumps), state-level subsidies, or PLI incentives — these can reduce your financial risk while boosting margins.

Once operations are stable, you can explore exports, especially to energy-scarce regions in Africa, Southeast Asia, or even remote areas in India where solar adoption is rising steadily.

Raw Materials

To run your unit, you’ll need a steady supply of materials, and thankfully, local availability is improving:

• Solar-grade silicon or wafers for PV modules
• Glass panels and aluminum frames for module housing
• Microcontrollers and PCBs for inverters
• Lithium-ion or lead-acid cells for batteries
• Motors, LEDs, wires, and enclosures for solar appliances

More suppliers within India now provide these materials, cutting down your dependency on imports. This also helps in controlling logistics costs and speeding up production.

Location Preferences

Where you set up your unit plays a big role in your long-term success. Here are a few things to consider:

• Industrial zones with renewable energy parks are great options as they often have power support, land access, and tax reliefs.
• States like Gujarat, Tamil Nadu, Rajasthan, and Telangana have solar-friendly policies and offer benefits like land lease subsidies or capital support.
• If you’re planning to export, being near a Special Economic Zone (SEZ), dry port, or shipping port can help in managing logistics smoothly and reducing costs.

Choosing the right location also helps you hire skilled or semi-skilled workers more easily and get faster permissions from local authorities.

Licensing & Compliance

To stay compliant and avoid legal troubles later, you’ll need to get a few registrations and approvals before starting:

• Udyam Registration under the MSME category – This gives you access to subsidies, priority loans, and government tenders.
• Factory License – Mandatory if your unit employs a certain number of workers or uses specific types of machinery.
• Pollution Clearance – Especially important if you’re handling batteries, chemicals, or e-waste, even in small quantities.
• BIS Certification – Products like solar panels, inverters, and batteries need to follow Indian safety and quality standards.
• GST Registration – Required for tax compliance and invoicing, especially if you’re supplying to other businesses or government departments.
• Trademark or IP Registration – If you’re developing a new product, brand, or technology, registering it protects your rights and builds credibility.

This setup insight is meant to help aspiring entrepreneurs, MSMEs, and small business owners plan their solar manufacturing venture smartly—from the tools they’ll need to the place they’ll set up and the licenses required to run legally.

Government Support for Solar-Based MSMEs

Schemes & Subsidies

1. PM-KUSUM Scheme: Offers up to 60% subsidy for solar pump manufacturing and deployment.
2. PLI Scheme for High-Efficiency Solar PV Modules: Provides financial incentives to domestic manufacturers.
3. Modified Special Incentive Package Scheme (M-SIPS): Helps with capex support for electronics units like inverters.
4. State-specific Solar Policies: Gujarat, UP, Karnataka, and Rajasthan offer capital subsidies, interest subvention, and land support.

Export Potential

India exported over $2.8 billion worth of solar components in 2023, with growing demand from African and Southeast Asian nations.

MSMEs can also leverage benefits under:

• MEIS (Merchandise Exports from India Scheme)
• RoDTEP (Remission of Duties and Taxes on Export Products)
• NSIC support for raw material procurement

Institutional Support

• SECI (Solar Energy Corporation of India)
• IREDA (Indian Renewable Energy Development Agency)
• MSME-DI & SIDBI for business advisory and soft loans

Challenges and Practical Tips for Entrepreneurs

Key Challenges

• Technology Upgradation: Solar tech evolves quickly; MSMEs need to stay current.
• Raw Material Dependence: Some key inputs (e.g., lithium cells, wafers) are still imported.
• Quality Control: BIS compliance and performance standards require investment in testing and skilled staff.
• Customer Trust: Market is sensitive to product quality and after-sales support.

Tips to Navigate the Space

1. Start with Niche Products: Focus on inverters, lights, or pumps instead of jumping into full module manufacturing.
2. Partner with EPC Companies: They offer steady orders and can help MSMEs scale.
3. Leverage Tech Platforms: Use government and private platforms for vendor registration, funding, and market access.
4. Invest in R&D and Certifications: These build credibility and enable access to premium buyers.
5. Stay Policy-Aware: Government schemes change often — timely application can save lakhs.

Future Potential of the Solar-Based Industry

The solar industry is not just growing — it’s evolving in ways that create huge space for new ideas, especially for small and medium enterprises. In the coming years, solar is expected to play a central role in how energy is produced, stored, and used across India and beyond. This shift is opening up many opportunities for MSMEs, startups, and regional manufacturers who want to build practical and profitable businesses.

Let’s break down the big trends that are shaping the future of this industry:

1. Energy Storage Is Becoming Essential

More homes, farms, and businesses are using solar power, but they also need a way to store that energy. That’s where batteries come in. People now want reliable solar systems that work even when the sun isn’t shining. This means battery-based setups — like solar plus storage units — are seeing strong demand.

For MSMEs, this is a big opportunity. Assembling battery packs, building hybrid systems, or supplying solar backup kits can become profitable product lines. Even basic battery testing and repair services are becoming sought after.

2. Solar in Farming Is Just Getting Started

Farmers are showing increasing interest in using solar for irrigation, especially in areas where electricity is either expensive or not reliable. These solar pumps and agro-solar kits are helping farmers cut their costs and reduce diesel usage.

In addition, new models are coming up where solar panels are installed over crops or alongside farms — called agri-voltaics. This dual use of land allows both farming and power generation at once. MSMEs can tap into this by manufacturing small-scale solar pumps, water controllers, or by packaging these systems for local markets.

3. Smarter Solar Means Smarter Products

With more people using smart gadgets, the expectation from solar products is also changing. Today, buyers are looking for solar systems that can connect to their mobile phones, show how much power is being generated, or adjust automatically depending on usage.

This has pushed demand for advanced inverters, smart charge controllers, and IoT-enabled systems. MSMEs that have a background in electronics or software can step into this segment by making tech-integrated solar products that are easy to use and monitor. These are especially useful for urban homes, schools, hospitals, and offices.

4. A New Market Is Emerging Around Solar Recycling

One lesser-known fact is that older solar panels and batteries also need to be dealt with after years of use. In the future, handling worn-out panels, recovering valuable materials, and refurbishing old systems will become a new business category. This falls under what is called the circular economy — where waste is reused, not dumped.

While this area is still developing, forward-looking entrepreneurs can start by offering small repair, reuse, and recycling services. Even collecting used panels and exporting refurbished ones to developing countries could become a niche.

For MSMEs, the shift toward smarter, cleaner, and locally built solar solutions means:

• You don’t always have to compete with large players. Instead, focus on niche needs — like rural applications, farm tools, or custom solar kits.
• Start with assembly, packaging, or integration rather than full manufacturing if capital is limited.
• Innovation isn’t only about technology — even simplifying products, reducing prices, or adding local language support can create real value.

As governments, businesses, and even individual households continue to switch to renewable energy, the demand for solar products — and all the parts that support them — will only grow. This industry is no longer limited to high-tech zones or large investors. It is open to local manufacturers, small service providers, and entrepreneurs who understand their local markets and are ready to build what those markets need.

Conclusion: A Bright Business Path for MSMEs

The solar-based industry is more than just an eco-friendly choice — it’s an economically smart, future-ready opportunity for India’s MSME sector. With favorable government policies, growing domestic and international demand, and a wide spectrum of product possibilities, there’s room for entrepreneurs at every scale.

Whether you’re in a rural area exploring solar pumps, or in a city looking to manufacture smart inverters, this is the time to start. The energy transition isn’t coming — it’s already here. And MSMEs have a golden chance to lead this change.

If you’re considering starting a manufacturing business that is scalable, impactful, and future-proof — solar is one of the best sectors to explore in the next five years.

References

• Ministry of New and Renewable Energy (MNRE): https://mnre.gov.in/
• India Solar Energy Market Report, IBEF: https://www.ibef.org/
• IRENA Global Solar Market Trends: https://www.irena.org/
• SECI Tenders & Projects: https://www.seci.co.in/
• MSME Schemes Portal: https://msme.gov.in/

Frequently Asked Questions (FAQ)