India’s Solar Capacity Set for Major Surge
India’s solar energy sector is poised for significant growth, with projections indicating the addition of 85-90 gigawatts (GW) of new solar capacity during the financial years 2026 and 2027. A recent report by SBI Caps highlights that this expansion is largely driven by the increasing adoption of residential rooftop solar systems. The report also notes that solar capacity additions could reach 30 GW in FY 2025, showcasing the sector’s resilience amid fluctuating demand.
Solar Capacity Growth and Projections
According to the SBI Caps report, the solar energy sector in India is on track to achieve unprecedented levels of capacity additions. The forecast suggests that annual module demand will reach 100 GW. However, the realization of these projections depends on several factors, including a reduction in the Power Purchase Agreement (PPA) and Power Supply Agreement (PSA) gap, the completion of the PM-SGMBY initiative by FY 2028, and improved compliance with Renewable Purchase Obligations (RPO).
Despite these optimistic projections, challenges remain. Land constraints, the implementation of the Advanced Land Cover Management (ALCM) policy, and restrictive state net metering policies could hinder progress. Conversely, timely government schemes, particularly the PM-KUSUM initiative, and efficient project execution could further boost demand for solar energy.
Remarkable Growth Over the Decade
India’s solar power capacity has experienced an extraordinary increase of 3,450% over the past decade, soaring from 2.82 GW in 2014 to an impressive 100 GW by January 31, 2025. The total installed solar capacity now stands at 100.33 GW, with an additional 84.10 GW currently under implementation and 47.49 GW in the tendering phase.
Solar energy has emerged as a key player in India’s renewable energy landscape, accounting for 47% of the total installed renewable energy capacity. In 2024 alone, the country added a record-breaking 24.5 GW of solar capacity, more than doubling the installations compared to 2023. The utility-scale solar sector saw the installation of 18.5 GW, marking a nearly 2.8 times increase from the previous year. Leading states such as Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Madhya Pradesh have significantly contributed to this growth.
Rooftop Solar Sector’s Expansion
The rooftop solar sector has also witnessed remarkable growth, with 4.59 GW of new capacity installed in 2024, reflecting a 53% increase from 2023. This surge can be attributed to the PM Surya Ghar: Muft Bijli Yojana, launched in 2024, which has facilitated nearly 900,000 rooftop solar installations across the country. This initiative empowers households to transition to clean energy solutions, further driving the adoption of solar technology.
Advancements in Solar Manufacturing
In addition to capacity growth, India has made significant strides in solar manufacturing. The country’s solar module production capacity has surged from a mere 2 GW in 2014 to 60 GW in 2024, positioning India as a global leader in solar manufacturing. This growth not only supports domestic energy needs but also enhances India’s standing in the global renewable energy market.
As India continues to expand its solar capacity and manufacturing capabilities, the future of solar energy in the country looks promising, with the potential to play a crucial role in meeting energy demands sustainably.
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