India’s solar industry is flourishing, driven by the nation’s vast solar potential, favorable policies, and a growing need for renewable energy sources.

Potential of India’s Solar Industry

India boasts a significant solar potential due to its geographical location, receiving abundant sunlight throughout the year. The country has an average solar insolation of 4-7 kWh/m² per day, making it ideal for solar energy generation. The vast land area available for solar installations further enhances this potential.

According to the Ministry of New and Renewable Energy (MNRE), India has a solar power potential of approximately 748 GW, assuming 3% of the wasteland area is used for solar installations. This potential is spread across various states, with Rajasthan, Gujarat, and Madhya Pradesh leading due to their high solar insolation and vast tracts of available land. As per IRENA, India’s installed solar PV capacity was around 62.8 GW in 2022, up from 49.3 GW in 2021. This was an increase of approximately 31% over the year.

Progress of India’s Solar Sector

India’s solar sector has witnessed remarkable growth over the past decade. This progress can be attributed to the government’s proactive policies, financial incentives, and international collaborations. India currently stands 4th globally in solar power capacity. In the last five years, the country’s solar installed capacity has experienced a monumental transformation, increasing from 21,651 MW to 70,096 MW in 2023. 

Government Initiatives and Policies

  1. National Solar Mission: Launched in 2010, the Jawaharlal Nehru National Solar Mission (JNNSM) aimed to establish India as a global leader in solar energy. The mission set an ambitious target of 20 GW of solar capacity by 2022, which was later revised to 100 GW.
  2. Solar Park Scheme: This scheme aims to develop large-scale solar parks to reduce project costs and provide developers with ready-to-use infrastructure. States like Gujarat and Rajasthan have been pioneers in establishing such parks. Designed to establish 50 Solar Parks of 500 MW and above with a cumulative capacity of ~38 GW by 2025-26.

    Under this scheme, so far, 11 Solar Parks with an aggregate capacity of 8521 MW have been completed, and 7 Solar Parks with an aggregate capacity of 3985 MW have been partially completed. In these parks, solar projects of an aggregate capacity of 10,237 MW have been developed.
  3. KUSUM Scheme: The Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme encourages the installation of solar pumps and grid-connected solar power plants in rural areas, promoting decentralized solar energy generation and reducing farmers’ dependence on diesel. Aimed to achieve solar power capacity addition of 30.8 GW by March 2026.
  4. International Solar Alliance (ISA): India, along with France, launched the ISA to promote solar energy and mobilize investments. The alliance aims to deploy over 1,000 GW of solar energy and mobilize over USD 1,000 billion by 2030​.

Installed Capacity and Growth

India’s installed solar capacity has grown exponentially from a mere 10 MW in 2010 to over 50 GW by 2023. This growth trajectory is set to continue, with India aiming to achieve 280 GW of installed solar capacity by 2030. The country’s solar installations are diversified across utility-scale projects, rooftop installations, and off-grid solar systems​.

Investment and Financing

The Indian solar sector has attracted significant domestic and international investments. Major financial institutions and development banks have provided funding for solar projects. Additionally, the introduction of green bonds and various financing schemes has facilitated the flow of capital into the sector.

Key Drivers of Growth

Several factors contribute to the growth of India’s solar industry:

  1. Cost Competitiveness: The cost of solar power has drastically reduced over the years, making it competitive with conventional energy sources. Technological advancements and economies of scale have driven down the cost of solar panels and installation.
  2. Policy Support: Consistent government policies and incentives, including tax benefits, subsidies, and favorable tariffs, have created a conducive environment for solar energy development.
  3. Environmental Concerns: Growing awareness about climate change and environmental sustainability has increased the demand for clean energy. Solar power, being a renewable and non-polluting source, aligns with global and national environmental goals.
  4. Energy Security: Solar energy reduces dependence on fossil fuels, enhancing energy security. It provides a reliable and indigenous source of power, reducing the volatility associated with oil and gas imports.

Challenges and Opportunities

Despite the significant progress, the Indian solar industry faces several challenges:

  1. Land Acquisition: Securing land for large-scale solar projects can be challenging due to legal and administrative hurdles. This issue is more pronounced in densely populated regions.
  2. Grid Infrastructure: Integrating large-scale solar power into the grid requires robust infrastructure. Grid stability and the ability to handle intermittent solar power remain critical issues.
  3. Financing: While investment has been substantial, continuous financial support is necessary to achieve the ambitious targets. Access to affordable financing and managing financial risks are ongoing challenges.
  4. Skilled Workforce: The rapid growth of the solar sector necessitates a skilled workforce for the installation, operation, and maintenance of solar plants. Training and capacity-building programs are essential to address this gap.

Future Outlook

The future of India’s solar industry appears promising, with several trends and developments shaping its trajectory:

  1. Technological Advancements: Innovations in solar technology, such as bifacial panels, floating solar plants, and solar storage solutions, are expected to enhance efficiency and reduce costs further.
  2. Hybrid Projects: Combining solar with other renewable sources like wind and hydro, as well as integrating energy storage systems, can provide a more stable and reliable power supply.
  3. Decentralized Solar Solutions: Off-grid and decentralized solar solutions, including solar pumps and mini-grids, are gaining traction, especially in rural and remote areas. These solutions can significantly improve energy access and reduce the load on the central grid.
  4. Corporate Participation: Increasing corporate interest in renewable energy, driven by sustainability goals and regulatory mandates, is expected to boost solar power adoption. Many companies are investing in captive solar power plants and signing long-term power purchase agreements (PPAs).
  5. International Collaboration: Continued international collaboration through platforms like the ISA and bilateral agreements can facilitate technology transfer, investment, and capacity building.

Conclusion

India’s solar industry holds immense potential to transform the country’s energy landscape. With supportive policies, technological advancements, and growing investment, India is well-positioned to become a global leader in solar energy. The journey ahead involves addressing challenges, leveraging opportunities, and ensuring sustainable growth to achieve the vision of a clean and green energy future​.