India's solar capacity is expected to surge in the Financial Year 2026 and 2027, with 85-90 gigawatts of new solar capacity anticipated to be added over the next two years, as per a report by SBI Caps.
The report notes that the inclusion of residential rooftop solar installations is expected to contribute to the sector's growth.
The report also noted that solar additions could potentially reach 30 GW by FY 25, as solar capacity additions have shown remarkable stability in the face of fluctuating demand.
According to the report, the predicted annual module demand is 100 gigawatts.
The report notes that the fulfillment of these projections is contingent upon a moderate decrease in the PPA-PSA gap, the completion of the PM-SGMBY project by FY28, and an increase in RPO compliance. However, potential drawbacks include land limitations, the implementation of ALCM, and restrictive state net metering policies. On the other hand, the report suggests that timely implementation of schemes such as PM-KUSUM, as well as efficient project execution, could boost demand.
According to government statistics, India's solar power industry has experienced a remarkable 3450 percent growth in capacity over the past decade, expanding from 2.82 GW in 2014 to 100 GW by 2025.
As of January 31, 2025, India's total installed solar capacity is 100.33 GW, with 84.10 GW currently in development and an additional 47.49 GW under contract.
Renewable energy growth in India is led by solar energy, which accounts for 47 percent of the country's total installed renewable energy capacity. In 2024, a record-breaking 24.5 GW of solar capacity was added, more than doubling the amount installed in 2023. Last year saw the installation of 18.5 GW of utility-scale solar capacity, an increase of nearly 2.8 times compared to 2023. The states of Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Madhya Pradesh are among the top-performing states, significantly contributing to India's total utility-scale solar installations.
The rooftop solar sector in India experienced a significant surge in 2024, with 4.59 gigawatts of new capacity installed, marking a 53 percent rise compared to 2023.
According to the government, a major factor behind this growth has been the Prime Minister's Solar Home Scheme, launched in 2024, which is now nearing 900,000 rooftop solar installations, enabling households across the country to adopt clean energy solutions.
India has also made considerable advancements in solar manufacturing. In 2014, the country had a relatively small solar module production capacity of just 2 GW. Over the past decade, this has increased to 60 GW by 2024, making India a prominent global leader in solar manufacturing.