|
Forecast Period
|
2027-2031
|
|
Market Size (2025)
|
USD 8 Billion
|
|
Market Size (2031)
|
USD 14 Billion
|
|
CAGR (2026-2031)
|
10.51%
|
|
Fastest Growing Segment
|
Polycrystalline
|
|
Largest Market
|
South India
|
Market Overview
India Solar
Energy Market was valued at USD 8 Billion in 2025 and is expected to reach USD 14 Billion by 2031 with a
CAGR of 10.51% during the forecast period.
Solar energy is the radiant light and
heat from the sun that is harnessed using various technologies such as solar
panels, solar thermal systems, and solar concentrators. It is a renewable and
abundant source of energy, making it a sustainable alternative to fossil fuels.
Solar energy can be converted into electricity using photovoltaic (PV) cells or
used directly for heating and lighting. It plays a vital role in reducing
greenhouse gas emissions and combating climate change, as it produces no air or
water pollution during operation. Solar power systems can be installed on
rooftops, integrated into building designs, or deployed in large-scale solar
farms. Technological advancements and decreasing costs have made solar energy
more accessible and efficient. As a clean and inexhaustible energy source,
solar energy contributes to energy security, economic development, and
environmental protection, making it a key component of the global transition to
renewable energy.
Key Market Drivers
Government
Policies and Initiatives
India's solar energy market has been significantly
propelled by strong government support in the form of policies, subsidies, and
long-term plans. The Indian government launched the National Solar Mission
(NSM) in 2010 as part of the National Action Plan on Climate Change (NAPCC),
which set ambitious targets for solar energy deployment. Over the years, this
mission has evolved, with updated targets aiming to reach 500 GW of non-fossil
fuel capacity by 2030, with a significant portion expected from solar.
Key initiatives such as PM-KUSUM (Pradhan Mantri Kisan
Urja Suraksha evam Utthan Mahabhiyan) focus on solarizing agricultural pumps,
benefiting farmers and reducing the diesel burden. The Renewable Energy
Development Agency (IREDA) and Solar Energy Corporation of India (SECI)
actively support solar projects through tenders and financial assistance.
Tax incentives like accelerated depreciation, GST
relief on solar components, and viability gap funding have lowered the entry
barriers for investors and developers. Moreover, renewable purchase obligations
(RPOs) have made it mandatory for power distribution companies and certain
industries to procure a portion of their electricity from renewable sources,
boosting demand.
These policies not only attract domestic players but
also encourage foreign direct investment (FDI). The ease of doing business,
combined with simplified clearance processes and clear policy frameworks,
creates a favorable environment for solar energy growth. India aims to achieve 300 GW
of solar capacity by 2030 as part of its broader renewable energy goal of 500
GW non-fossil fuel capacity. As of early 2025, India has achieved over 100 GW of installed solar power capacity, marking a major milestone in its renewable energy journey. India added a record 24.5 GW of solar capacity in 2024, the highest annual addition to date. Utility-scale solar projects accounted for approximately 18.5 GW of the 2024 additions, while rooftop solar contributed around 4.6 GW. India’s off-grid solar capacity stood at about 1.5 GW in 2024, supporting rural electrification and remote access.
Declining Costs
of Solar Technology
One of the most influential drivers of India’s solar
energy market is the dramatic decline in the cost of solar photovoltaic (PV)
technology over the past decade. The reduction in the price of solar panels,
driven largely by global economies of scale and technological innovation, has
made solar power more cost-competitive than many conventional energy sources.
In India, solar power tariffs have fallen
significantly, with some recent bids dropping below ₹2 per kilowatt-hour (kWh),
making solar one of the cheapest sources of electricity. This cost reduction
has made solar energy accessible not just to large-scale utilities, but also to
commercial, industrial, and residential users.
Domestic manufacturing of solar components such as PV
modules, inverters, and mounting structures is gradually improving with
government support under initiatives like Production Linked Incentive (PLI)
schemes. This reduces dependency on imports and stabilizes costs over time. Additionally,
innovation in storage technologies, such as lithium-ion batteries, is improving
the reliability of solar power by enabling energy to be stored for use during
non-sunny hours. The cost of solar energy storage is also gradually falling,
enhancing the appeal of solar-plus-storage systems.
The affordability of solar power is particularly
impactful in a price-sensitive market like India, where access to affordable
electricity is crucial for economic development. As solar technology continues
to evolve, its application across sectors—from rural electrification to urban
infrastructure—becomes more viable. The cost of solar photovoltaic (PV)
modules, which account for nearly 60-70% of total project costs, has declined
by over 80% in the last decade globally, reflecting similarly in India due to import
and domestic production.
Rising Energy Demand and Urbanization
India’s rapid economic growth, urbanization, and
rising living standards have led to a surge in energy demand. As one of the
fastest-growing economies in the world, India is experiencing increased energy
consumption across residential, commercial, and industrial sectors. Traditional
power sources, primarily coal, are struggling to meet this demand sustainably,
creating a pressing need for alternative energy sources like solar.
Urban areas are expanding rapidly, and with that comes
the demand for modern infrastructure, electricity-intensive appliances, and
public services. Simultaneously, rural electrification efforts are extending
the grid to previously underserved areas. Solar energy, with its modular and
decentralized nature, is ideally suited to meet these dual challenges.
Distributed solar systems, such as rooftop solar
installations, are increasingly popular in urban homes, commercial buildings,
and schools. They not only reduce the load on centralized grids but also
provide consumers with a sense of energy independence. For rural India,
off-grid and mini-grid solar solutions offer a reliable and cost-effective
means of electrification, especially in remote regions where grid expansion is
economically unfeasible. Furthermore, industrial and commercial consumers are
turning to solar to reduce operational costs and meet sustainability goals.
With net metering and open access policies, these consumers can feed excess
solar power into the grid, further enhancing the viability of solar investment.
The projected growth in electric vehicles (EVs) and digital
infrastructure will further drive electricity demand, necessitating clean and
scalable energy solutions. Solar energy, being versatile and scalable, is well
positioned to support this transition. India’s total electricity consumption
has been growing at an average rate of around 5-6% per year over the past
decade, driven by industrialization and rising household consumption.
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Key Market Challenges
Land Acquisition and Infrastructure Constraints
One of the major challenges
hindering the growth of the solar energy sector in India is land acquisition.
Utility-scale solar projects require large tracts of land—often several acres
per megawatt of capacity. Finding suitable land that is non-agricultural,
unencumbered by legal disputes, and close to power infrastructure is a
persistent issue.
India is a densely populated
country with competing demands for land—agriculture, urbanization, industry,
and conservation. In rural areas, even barren or fallow land may hold cultural
or community significance, leading to resistance from local populations. Legal
complexities related to ownership, title verification, and acquisition
procedures further delay project implementation. In addition to land,
associated infrastructure such as transmission lines, substations, and grid
connectivity is not always available where solar potential is highest. Many
solar-rich states like Rajasthan or Gujarat have vast desert areas suitable for
solar farms, but lack the robust infrastructure needed to evacuate generated
power efficiently.
This leads to a “grid
bottleneck” situation, where generated solar power cannot be transmitted to
demand centers. The development of green energy corridors, while a step in the
right direction, is still ongoing and does not yet cover all solar-rich regions
adequately. Moreover, the time and cost associated with securing environmental
clearances, conducting land surveys, and managing local political dynamics
often lead to delays, cost overruns, or even project cancellations. These risks
deter investors and developers who seek predictable returns and streamlined
approval processes.
Land acquisition challenges
also impact rooftop solar deployment in urban areas. Space limitations,
structural constraints of older buildings, and ownership disputes in shared
properties hinder the widespread adoption of solar panels in cities.
Financial and Investment Barriers
Despite growing interest and
falling technology costs, the Indian solar energy sector faces significant financial
challenges that slow its development. These challenges stem from issues related
to project financing, payment delays, creditworthiness of buyers, and policy
uncertainties.
Many solar projects are
capital-intensive and require substantial upfront investment. While long-term
returns may be favorable, securing initial funding—especially for smaller
developers—remains difficult. Indian financial institutions are often cautious about
lending to renewable energy projects due to concerns about revenue stability,
regulatory changes, and land-related risks.
The financial health of
India’s power distribution companies (discoms) poses a serious challenge. Many
discoms are burdened with operational inefficiencies, high transmission losses,
and poor bill recovery rates. This affects their ability to honor power purchase
agreements (PPAs) with solar project developers. Delays in payments from
discoms can stretch for months, straining the cash flows of solar companies and
making the sector less attractive to investors. Moreover, some states have
attempted to renegotiate signed PPAs to lower tariffs, citing changes in market
conditions. While such moves may seem fiscally motivated, they damage investor
confidence and introduce an element of policy unpredictability. Investors and
lenders demand regulatory stability, and such actions create a perception of
risk, deterring future investment.
Access to low-cost financing
remains another hurdle. While international financial institutions and green
funds are increasingly interested in supporting Indian solar projects,
bureaucratic red tape, currency risks, and compliance requirements can slow disbursement
and increase costs.
Rooftop solar and
residential solar face even steeper financial barriers. Many households and
small businesses lack awareness of financing options or face difficulties in
securing loans due to a lack of collateral or credit history. Even where
government subsidies are available, delays in disbursement reduce the financial
appeal.
To address these challenges,
India needs more innovative financing models, such as solar leasing, green
bonds, and public-private partnerships. Improving the financial health of
discoms, ensuring payment security mechanisms, and maintaining regulatory consistency
will be crucial in attracting both domestic and foreign investment.
Key Market Trends
Growth of Rooftop Solar and Decentralized Systems
A significant trend in India’s solar energy sector is
the rapid growth of rooftop solar systems and decentralized solar solutions.
Unlike utility-scale projects, which require vast land and infrastructure,
rooftop solar can be installed on residential, commercial, and industrial
buildings, making it a flexible and scalable solution.
Over the past few years, the Indian government has actively
promoted rooftop solar through schemes such as the Grid-Connected Rooftop Solar
Programme, offering financial subsidies and incentives to residential
consumers. Net metering policies, which allow consumers to feed excess solar
electricity back into the grid, have further made rooftop solar financially
attractive.
Rooftop solar adoption is being driven by rising
electricity tariffs, particularly for commercial and industrial consumers, who
are increasingly turning to solar to reduce energy bills and meet
sustainability goals. Even in the residential sector, middle-class households
are exploring solar as a means to reduce dependency on erratic grid power and
diesel generators.
In rural areas, decentralized solar systems—such as
mini-grids, solar pumps, and home lighting systems—are playing a vital role in
providing energy access where conventional grid extension is unfeasible or too
costly. Programs like PM-KUSUM promote solar-powered irrigation for farmers,
combining clean energy with livelihood support.
Despite regulatory hurdles and limited consumer
awareness in some regions, the growth trajectory for rooftop and decentralized
solar remains strong. Advances in smart inverters, battery storage, and digital
monitoring tools are making these systems more efficient and user-friendly.
Emergence of Solar-Plus-Storage Solutions
India’s solar energy market is witnessing a rising
interest in solar-plus-storage systems, a trend that is gaining momentum due to
the growing need for reliable, round-the-clock power supply. Solar energy by
nature is intermittent—it can only be generated during daylight hours and is
subject to weather conditions. Storage solutions, primarily battery-based
systems, enable the capture of excess solar power for use during non-sunny
periods, such as nighttime or during grid outages.
As the share of solar in the national energy mix
increases, grid stability becomes a concern. Integrating storage helps balance
power supply and demand, improves grid resilience, and reduces reliance on
fossil-fuel-based backup systems. For commercial and industrial users,
solar-plus-storage ensures uninterrupted power supply, helping avoid costly
production losses due to power cuts.
With the cost of lithium-ion batteries steadily
declining, and domestic production capacities expanding under initiatives like
the PLI (Production Linked Incentive) scheme, solar storage is becoming more
financially viable. Companies are also exploring advanced storage technologies,
such as flow batteries and hybrid inverters, which offer longer life cycles and
greater efficiency.
Government tenders are beginning to include energy
storage requirements, especially for utility-scale projects. Pilot projects
involving time-of-day pricing and dispatchable solar power are demonstrating
the value of coupling generation with storage.
In the residential sector, while adoption is still
nascent due to cost barriers, the increasing frequency of power outages in
semi-urban and rural areas is driving demand for small-scale solar-plus-battery
solutions. These systems offer households energy independence and security,
particularly in areas with unreliable grid access.
Segmental Insights
Technology Insights
Solar Photovoltaic (PV) technology
dominated the Indian solar energy market due to a combination of economic,
technical, and practical advantages that make it far more suitable for the
country's diverse energy needs compared to other solar technologies like Concentrated
Solar Power (CSP).
Cost-effectiveness is a key driver. Over the past
decade, the price of PV modules—especially crystalline silicon—has dropped
significantly, making PV systems among the most affordable forms of new
electricity generation in India. Economies of scale, technological
improvements, and global competition have driven down the cost per
kilowatt-hour, making PV highly attractive to both public and private sector
developers.
PV systems are modular and scalable, allowing
installation from small rooftop setups to large utility-scale solar parks. This
flexibility supports wide deployment across urban, semi-urban, and rural
regions. PV systems are also faster to install and require less complex
infrastructure compared to CSP, which needs high solar irradiance, large tracts
of land, and expensive tracking and thermal storage systems.
Another advantage is PV's performance in varied
climatic conditions. Unlike CSP, which depends heavily on direct sunlight
(direct normal irradiance), PV panels can generate electricity even under
diffuse light conditions, such as cloudy weather. This makes them more suitable
for a wide geographical range in India, not just the desert regions.
In addition, supportive government policies such as
subsidies, net metering, and solar park development have been focused
predominantly on PV. Initiatives like the National Solar Mission, PM-KUSUM, and
various state-level rooftop solar programs have accelerated PV deployment.
PV technology requires less water for operation and
cooling, a crucial factor in water-stressed regions of India.
Application Insights
The industrial segment dominated the Indian solar energy market
primarily due to its high energy consumption patterns, cost-saving potential,
and strong sustainability commitments. Industrial operations—such as
manufacturing, processing, and large-scale logistics—consume significant
amounts of electricity, often at high tariffs charged by state distribution companies.
Solar energy offers an economically viable alternative, enabling industries to
reduce operational costs and gain greater control over their energy supply.
One key driver is the cost-effectiveness of solar
power. With the levelized cost of solar energy falling consistently over the
past decade, many industries find it cheaper than grid electricity, especially
in states with high commercial tariffs. By investing in captive solar plants or
entering into power purchase agreements (PPAs), industries can lock in stable,
long-term energy prices, shielding themselves from tariff volatility. Additionally,
regulatory frameworks such as open access policies allow industrial consumers
to buy solar power directly from producers, bypassing traditional distribution
networks. This facilitates the procurement of clean energy at competitive
rates, further boosting adoption among industrial players.
The push for corporate sustainability is another major
factor. Many Indian and multinational companies operating in India are adopting
renewable energy targets as part of their Environmental, Social, and Governance
(ESG) goals or global initiatives like RE100. Solar energy plays a pivotal role
in helping these companies meet their carbon reduction objectives. Moreover,
technological advancements and innovative financing models—such as solar
leasing and energy-as-a-service—have made it easier for industries to adopt
solar without significant upfront investment.
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Regional Insights
South India dominated the Indian solar energy market due to a
combination of favorable climatic conditions, strong policy support, and
well-developed infrastructure. The region receives abundant sunlight throughout
the year, with high solar insolation levels averaging between 5 to 6.5 kWh/m²
per day. This consistent and intense solar radiation makes solar power
generation highly efficient and economically viable in states such as Tamil
Nadu, Karnataka, Andhra Pradesh, and Telangana.
In addition to natural advantages, South Indian states
have been proactive in implementing progressive renewable energy policies. For
example, Tamil Nadu was one of the earliest adopters of solar power in India,
launching attractive tariff structures, facilitating open access, and
establishing solar parks. These policies have created a favorable ecosystem
that encourages private investment and accelerates project development.
South India also benefits from better grid
infrastructure compared to many other parts of the country. The region’s
transmission and distribution networks are relatively robust, enabling smoother
evacuation of solar-generated power. The presence of large industrial and
commercial consumers further drives demand for solar energy, especially through
rooftop installations and captive power plants. Furthermore, the region has
seen significant growth in solar manufacturing and service industries,
fostering a local supply chain that reduces costs and project timelines. Many
solar developers and equipment suppliers have their bases in South India,
strengthening the market’s overall competitiveness.
Recent Developments
- On 23rd May 2025, Envision Energy
has introduced three innovative products designed for long-term energy storage,
aiming to enhance the reliability and efficiency of renewable energy systems.
These new solutions focus on extending storage duration, improving energy
management, and supporting grid stability. By integrating advanced technology
and sustainable design, Envision Energy seeks to address the growing demand for
dependable, large-scale energy storage, enabling better utilization of
renewable sources and facilitating the transition to a cleaner, more resilient
energy future.
- On 6th May 2025, Huasun Energy is
set to unveil its next-generation Heterojunction (HJT) solar panels at
Intersolar Europe 2025. These advanced panels promise higher efficiency,
improved performance, and enhanced durability, positioning Huasun at the
forefront of solar technology innovation. The launch highlights the company’s
commitment to delivering cutting-edge solutions that support the global
transition to renewable energy. Industry experts and attendees at the event can
expect to see how Huasun’s new HJT panels will drive greater energy yield and
sustainability in solar power applications.
- In February 2025, Solex Energy has launched a new solar module production line with an
annual capacity of 800 MW, marking a significant expansion in its manufacturing
capabilities. This development aims to meet the growing demand for high-quality
solar modules in the renewable energy market. By enhancing production
efficiency and scaling operations, Solex Energy is strengthening its position
in the industry while supporting India’s clean energy goals. The new facility
underscores the company’s commitment to innovation and sustainable solar solutions.
Key Market Players
- Adani Green Energy Limited
- Tata Power Solar Systems Limited
- ReNew Power Ventures Pvt. Ltd.
- Azure Power Global Limited
- ACME Solar Holdings Limited
- Hero Future Energies Pvt. Ltd.
- Greenko Group
- Waaree Energies Ltd.
|
By Technology
|
By Solar Module
|
By Application
|
By End Use
|
By Region
|
- Solar Photovoltaic
- Concentrated Solar Power
|
- Monocrystalline
- Polycrystalline
- Cadmium Telluride
- Amorphous Silicon Cells
- Others
|
- Residential
- Commercial
- Industrial
|
- Electricity
Generation
- Lighting
- Heating
- Charging
|
- South India
- North India
- West India
- East India
|
Report Scope:
In this report, the India Solar
Energy Market has been
segmented into the following categories, in addition to the industry trends
which have also been detailed below:
- India
Solar
Energy Market, By Technology:
o Solar Photovoltaic
o Concentrated Solar Power
- India
Solar
Energy Market, By Solar Module:
o Monocrystalline
o Polycrystalline
o Cadmium Telluride
o Amorphous Silicon Cells
o Others
- India
Solar Energy Market, By Application:
o Residential
o Commercial
o Industrial
- India
Solar Energy Market, By End Use:
o Electricity Generation
o Lighting
o Heating
o Charging
- India
Solar Energy Market, By Region:
o South India
o North India
o West India
o East India
Competitive Landscape
Company Profiles: Detailed analysis of the major companies
present in the India Solar Energy Market.
Available Customizations:
India Solar Energy Market report with the
given market data, TechSci Research offers customizations according to a
company's specific needs. The following customization options are available for
the report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
India
Solar
Energy Market is an upcoming report to be released soon. If you wish an early
delivery of this report or want to confirm the date of release, please contact
us at [email protected]