India has made significant progress in its solar energy sector, crossing the milestone of 100 GW of installed solar power capacity as of January 2025. The government aims to achieve 500 GW of non-fossil fuel energy capacity by 2030, and solar power is expected to play a critical role in meeting this target. Over the last decade, India’s solar power capacity has grown 25 times, from 3.99 GW in FY2015 to 100 GW in FY2025. Its share in the total installed renewable energy capacity has increased from 10% to over 60% during this period.
In 2024 alone, India added a record 24.5 GW of solar capacity. Utility-scale projects, in particular, saw substantial growth, contributing 18.5 GW of this addition. Several government schemes like PM Surya Ghar: Muft Bijli Yojana and incentives such as the Production Linked Incentive (PLI) scheme have supported this growth. Despite the high dependency on imports from China for solar modules and PV cells, imports from China have dropped significantly. In FY2024, China’s share in India’s solar module imports reduced from over 90% in previous years to 65%, and in PV cells, from 93% to 56%. Meanwhile, India’s solar module exports have increased 23 times since FY2022, with the US accounting for over 90% of these exports.
Several states have been at the forefront of solar installations. Rajasthan, Gujarat, Karnataka, Tamil Nadu, Maharashtra, Telangana, and Andhra Pradesh together account for 82% of India’s total installed solar capacity. Southern states have shown more proactive implementation of solar energy projects. While Rajasthan leads in the north, states like Karnataka, Tamil Nadu, and Telangana dominate in the south.
India’s domestic solar manufacturing industry still relies heavily on imported raw materials like polysilicon and wafers. Currently, local value addition is limited to about 30% to 40%, and manufacturing facilities operate at 40% to 45% of their total capacity. However, several Indian companies such as Tata Power, Reliance Industries, Waaree Energies, and Vikram Solar are expanding their manufacturing capacities, aiming to reduce dependency on imports. The PLI scheme and other government policies are encouraging this shift. Yet, India still lacks domestic manufacturing facilities for wafers and polysilicon, which will continue to require imports in the near term.
The solar module export market is growing fast, particularly in the US. India’s solar module exports rose by 91% in FY2024 compared to FY2023. Major domestic manufacturers are targeting the US market, which has imposed higher tariffs on Chinese solar products, creating opportunities for Indian companies. However, India remains cautious about possible reciprocal tariffs from the US in the future.
The Indian government has announced new policy measures in its 2025-26 budget, including a dedicated INR 100 billion fund to support solar infrastructure and an extension of the PLI scheme with an upgraded outlay of INR 240 billion. There is also a focus on rooftop solar, decentralized energy systems, and integrating green hydrogen production with solar energy. Tax incentives for solar developers and single-window clearance systems for project approvals aim to ease business operations in the sector.
Challenges remain, including China’s dominance in the global solar supply chain, limited integrated domestic production, and the need for quality improvement in Indian solar modules. However, with strong government support, India is on a steady path towards expanding its solar power capacity and enhancing its competitiveness in renewable energy.
