Solar Energy Market in India

India’s solar energy sector is growing rapidly due to ambitious government policies and a global shift toward renewable energy. With a record 10 GW of capacity added in Q1 2024 alone, the nation is on track to meet its target of 500 GW by 2030.

Market insights:

India’s cumulative installed solar energy capacity increased from 22.35 GW in FY 2018 to 90.76 GW in FY 2024, expanding at a compound annual growth rate (CAGR) of ~26.31%.

India’s solar market growth is driven by supportive initiatives such as the PM-KUSUM scheme for rural solar adoption, the Solar Energy Corporation of India's (SECI) large-scale auctions, and strong private sector investments. In 2024, utility-scale solar projects dominate installations, accounting for 70% of new capacity. Rooftop solar adoption also increased, though challenges in financing and grid infrastructure persist. The market is set to benefit from India’s planned solar parks and manufacturing incentives, aiming for a 40% reduction in renewable energy costs by 2029.

Segment insights:

The solar energy market in India can be segmented into utility-scale, rooftop, and off-grid solar. Utility-scale projects lead in capacity additions, with major hubs in Rajasthan and Gujarat, while rooftop solar sees steady growth across urban commercial and residential segments, especially with recent financial support schemes. Off-grid solar, focused on rural and underserved areas, is set to grow with investments in microgrids and agricultural applications. This segmentation reflects varying demand, cost structures, and geographic suitability across India.

Market Opportunities:

Significant opportunities lie in solar infrastructure development, such as floating solar projects to maximize land use and expand capacity. The rise of solar energy storage solutions also presents potential for advancements, particularly with government backing for energy storage policies. Furthermore, growth in solar panel manufacturing, incentivized by India’s Production Linked Incentive (PLI) scheme, could reduce import dependency, boost domestic production, and create jobs. The emphasis on clean energy in India's economic planning signals a steady demand for innovative solar solutions over the next five years.