US still a key market despite incentive cuts; Texas base to expand to 3GW: Waaree Energies CEO

Waaree Energies Ltd is strategically expanding its manufacturing base in the United States, specifically in Texas, as part of its growth plan. The company aims to achieve a manufacturing capacity of 3 gigawatts (GW) by the financial year 2026. This expansion comes amid significant changes to the US Inflation Reduction Act (IRA), which Waaree's Whole-time Director & CEO, Amit Paithankar, believes the company is well positioned to handle. Despite potential pressures on pricing dynamics due to a reduction in tax incentives under the new legislation, Paithankar remains confident in the company's ability to maintain its profit margins.

The US Inflation Reduction Act has introduced adjustments that could influence the competitive landscape, particularly in how companies manage their pricing strategies. Paithankar, in an interaction with Business Today, acknowledged the reduction in tax incentives might present challenges; however, the company is prepared to navigate these complexities while still achieving its financial objectives.

Here's an edited excerpt from the interview with Waaree Energies CEO:

1) What's next for Waaree after the withdrawal of US tax incentives for solar as a large part of the company's order book (around Rs 47,000 crore) is from the US?

The US market remains a significant pillar for Waaree, and we continue to see robust demand for high-quality solar modules. While recent US policy changes, including the phase-out of certain tax incentives, have introduced new dynamics, Waaree's diversified business model positions us well to adapt. We have manufacturing footprints both in India and in the US, allowing us to flexibly align our supply chain and production strategies with evolving regulatory frameworks. Importantly, the US is increasingly focused on sourcing from countries and companies that comply with stringent supply chain and labour standards. India, and by extension Waaree, is well-placed to benefit from this shift, as we ensure our entire value chain is free from forced labour and meets all traceability requirements. We believe that, despite the withdrawal of some incentives, the US market will continue to offer significant opportunities for compliant and reliable suppliers like Waaree.

2) How does the company plan to offset the Inflation Reduction Act (IRA) loss?

Waaree Energies is well-positioned to offset any potential impact from the recent changes in the US Inflation Reduction Act (IRA), particularly in light of the 'One Big Beautiful Bill Act'. The new legislation will not significantly affect operations for the next three years, stating that incentives will begin phasing out from 2028 instead of 2029, giving customers and investors ample assurance in the medium term. To reinforce this stability, Waaree is leveraging a strong order book, with over Rs 47,000 crore in consolidated orders — more than half of which originate from the US — secured through long-term contracts with upfront advances. The company is also expanding its US manufacturing base in Texas, aiming for a capacity of 3 GW by FY26, aligning with policy preferences for domestic production over imports from foreign entities of concern. Waaree is poised to benefit from rising energy demand driven by the rapid adoption of AI technologies and data centers. To further strengthen its market position, we are diversifying into upstream components like ingots and wafers to address gaps in the US solar supply chain. Collectively, these strategies ensure Waaree remains resilient and growth-focused despite the evolving US policy environment.

3) Could the tax incentive cut lead to price pressure on Waaree's solar modules and panels in the US market? If so, how does the company plan to maintain margins?

While the reduction in tax incentives under the new US legislation may put some pressure on pricing dynamics, Waaree Energies is well-positioned to maintain its margins. The bill's provisions restricting tax credits for products linked to "foreign entities of concern" (FEOC), which largely target Chinese manufacturers, create a favorable environment for companies like Waaree that are FEOC- and ULFP-compliant. This compliance ensures our eligibility for IRA-linked benefits, helping us remain competitive in the US market. Moreover, the policy shift opens up supply chain opportunities for Indian manufacturers. We are actively leveraging this by expanding our product offerings to include ingots and wafers in addition to solar cells — allowing us to integrate more value-added components and optimise margins. These strategic moves, along with our growing US manufacturing presence, equip us to absorb pricing pressures while continuing to scale profitably.

4) How might the change in US policy affect Waaree's long-term capex plans, capacity expansion, or IPO valuation (if applicable)?

We remain bullish about the long-term potential of the US market and continue to see it as a key pillar of our global growth strategy. While the recent policy changes will be closely monitored, they do not alter our broader vision. Our long-term capex and capacity expansion plans, particularly in the US, remain intact — though the timing and scale of certain investments may be adjusted depending on how the policy landscape evolves. We are committed to staying agile and responsive to market dynamics, ensuring that our capital deployment aligns with emerging opportunities. As for any potential IPO considerations, US market trends will be one of several factors influencing our approach to timing and valuation.

5) Will Waaree Energies revise its international growth strategy or shift focus to other markets such as Europe, the Middle East, or Southeast Asia?

We are constantly exploring new markets to expand our global footprint and strengthen our presence in the renewable energy sector. The signing of the UK Free Trade Agreement (FTA) presents a significant opportunity in this direction. It not only reinforces our commitment to international growth but also paves the way for deeper engagement with one of the world's most dynamic and evolving energy markets. With the US market poised for accelerated clean energy adoption, we see this as a strategic moment to build new partnerships, tap into emerging demand and contribute meaningfully to the global energy transition.