How to Use a Terraform Provider Locally

Recently, I was working on a project that needed Terraform, but there was a catch; I had to work in an environment where there is no access to the Terraform Registry. So, I had to figure out how to use a Terraform provider locally, without relying on Terraform’s online registry. If you’re in a similar boat whether for testing, security, or any other reason then this guide is for you!

Terraform doesn’t just pick up providers from your directory automatically. You need to set things up manually, and that’s where my scripts come in.

Step 1: Get Your Provider Binary

First, grab your provider binary file (in this case, we’re using vsphere with version 2.10.0). Make sure it's in your working directory before running the script.

Step 2: Run the PowerShell Script (Windows)

Save the following script as setup-local-provider.ps1 and execute it in your PowerShell terminal:

# PowerShell script to setup local Terraform provider in current directory

$version = "2.10.0"
$provider = "vsphere"
$providerBinary = "terraform-provider-$provider`_v$version.exe"

# Function to create terraform.rc file
function Create-TerraformRC {
    $rcContent = @"
provider_installation {
  filesystem_mirror {
    path = "$PWD\.terraform\plugins"
  }
  direct {
    exclude = ["registry.terraform.io/*/*"]
  }
}
"@

    $rcPath = "$env:APPDATA\terraform.rc"
    $rcContent | Out-File -FilePath $rcPath -Encoding UTF8 -Force
    Write-Host "Created terraform.rc at: $rcPath"
}

# Function to create provider.tf file
function Create-ProviderConfig {
    $tfContent = @"
terraform {
  required_providers {
    $provider = {
      source = "hashicorp/$provider"
      version = "$version"
    }
  }
}
"@

    $tfPath = "provider.tf"
    $tfContent | Out-File -FilePath $tfPath -Encoding UTF8 -Force
    Write-Host "Created provider.tf configuration"
}

try {
    # Verify provider binary exists in current directory
    if (-not (Test-Path $providerBinary)) {
        throw "Provider binary not found in current directory: $providerBinary"
    }

    # Create directory structure
    $providerDir = ".terraform/plugins/registry.terraform.io/hashicorp/$provider/$version/windows_amd64"
    New-Item -ItemType Directory -Force -Path $providerDir | Out-Null
    Write-Host "Created provider directory structure"

    # Copy provider binary
    Copy-Item -Path $providerBinary -Destination "$providerDir/$providerBinary" -Force
    Write-Host "Copied provider binary to: $providerDir/$providerBinary"

    # Create terraform.rc file
    Create-TerraformRC

    # Create provider configuration
    Create-ProviderConfig

    Write-Host "`nSetup completed successfully!`n"
    Write-Host "Next steps:"
    Write-Host "1. Run terraform init -plugin-dir='.terraform/plugins' to initialize your working directory"
    Write-Host "2. Create your terraform configuration files (.tf)"
    Write-Host "3. Run 'terraform plan' to verify the setup"

} catch {
    Write-Host "Error: $_" -ForegroundColor Red
    exit 1
}

Step 3: Run the Linux Script (Linux/macOS)

Save the following script as setup-local-provider.sh and execute it in your terminal:

#!/bin/bash

version="2.10.0"
provider="vsphere"
provider_binary="terraform-provider-$provider_v$version"

# Function to create terraform.rc file
create_terraform_rc() {
    cat <<EOF > ~/.terraformrc
provider_installation {
  filesystem_mirror {
    path = "$PWD/.terraform/plugins"
  }
  direct {
    exclude = ["registry.terraform.io/*/*"]
  }
}
EOF
    echo "Created terraform.rc at ~/.terraformrc"
}

# Function to create provider.tf file
create_provider_config() {
    cat <<EOF > provider.tf
terraform {
  required_providers {
    $provider = {
      source = "hashicorp/$provider"
      version = "$version"
    }
  }
}
EOF
    echo "Created provider.tf configuration"
}

# Main setup
if [ ! -f "$provider_binary" ]; then
    echo "Error: Provider binary not found in current directory: $provider_binary" >&2
    exit 1
fi

# Create directory structure
provider_dir=".terraform/plugins/registry.terraform.io/hashicorp/$provider/$version/linux_amd64"
mkdir -p "$provider_dir"
echo "Created provider directory structure"

# Copy provider binary
cp "$provider_binary" "$provider_dir/"
echo "Copied provider binary to: $provider_dir/$provider_binary"

# Create terraform.rc file
create_terraform_rc

# Create provider configuration
create_provider_config

echo -e "\nSetup completed successfully!\n"
echo "Next steps:"
echo "1. Run twtrito initialize your working directory"
echo "2. Create your terraform configuration files (.tf)"
echo "3. Run 'terraform plan' to verify the setup"

Step 4: Initialize Terraform

Run:

terraform init -plugin-dir='.terraform/plugins'

This tells Terraform to use the local plugin directory instead of trying to download the provider.

Step 5: Verify Your Setup

Try running:

terraform plan

If everything is set up correctly, Terraform should recognize the provider and not try to download it from the registry.