India’s Solar Rise
A decade ago, solar power occupied only a small place in India’s electricity mix. Today, it forms the largest share of the country’s renewable energy capacity. From an installed capacity of approximately 3 GW in 2014, the sector has expanded more than fiftyfold, reaching 162.15 GW till 30 June 2026.
This transformation is driven by policy support, infrastructure development, manufacturing expansion, and citizen participation. Initiatives such as solar parks, rooftop systems, and solarised agricultural pumps are accelerating deployment across the country. The latest push for solar growth is the newly approved Pradhan Mantri Surya Sarovar Yojana (PM-SSY).
The Government approved the Pradhan Mantri Surya Sarovar Yojana (PM-SSY) on 31 July 2026. The scheme aims to support 5,000 MW of Floating Solar Photovoltaic (FSPV) projects with co-located Energy Storage Systems (ESS). The ESS with a minimum storage capacity of two hours (10,000 MWh) will further help states manage peak demand. By utilising existing reservoirs and industrial ponds, the scheme will reduce pressure on scarce land resources. It will also improve grid reliability through integrated energy storage. With an outlay of ₹5,070 crore, the scheme will be implemented from FY 2026– 27 to FY 2030– 31.
The scheme is based on an assessment by the National Institute of Solar Energy (NISE). The assessment estimates a floating solar potential of about 102.18 GWp across India’s reservoirs and suitable inland water bodies. The scheme is expected to reduce around 10 million tonnes of CO₂ emissions annually. It will generate 16,000–17,000 full-time equivalent jobs. It will also promote domestic manufacturing of floatation systems, PV cells, modules and energy storage systems. All States and Union Territories will be eligible to benefit through this scheme. The initiative will increase India’s floating solar capacity by 5,000 MW, from the current level of around 700 MW.
The coordinated momentum has translated into measurable outcomes. The country has added 37 GW of solar capacity in 2025, surpassing the United States in annual additions. India has also emerged as the world’s second-largest solar growth market, underlining its growing role in the global clean energy transition.
A Decade of Solar Expansion
A strong policy framework laid the foundation for India’s solar expansion. Key initiatives included the National Solar Mission (2010), the Solar Parks Scheme, the Green Energy Corridor Programme, and competitive bidding. Together, they accelerated large-scale solar deployment.
Solar Capacity Across India
Solar deployment spans diverse geographies and climatic zones. Rajasthan, Gujarat, Karnataka, Tamil Nadu, Andhra Pradesh, and Maharashtra account for a significant share of installed capacity. Large solar projects contribute 118.79 GW of installed capacity. Some of the large solar projects include the Bhadla Solar Park (Rajasthan), Pavagada Solar Park (Karnataka), and Rewa Ultra Mega Solar Park (Madhya Pradesh). Rooftop solar systems connected to the electricity grid contribute another 27.88 GW. The remaining capacity comes from hybrid solar projects and off-grid solar systems. Hybrid projects combine solar power with battery storage or other power sources, while Off-grid systems provide electricity in areas not connected to the grid.
Record Growth in FY 2025–26
FY 2025–26 marked a milestone year for India’s RE sector, with record additions in both solar and non-fossil fuel capacity.
India added 44.61 GW of solar capacity, nearly double the 23.83 GW added in FY 2024–25.
Solar module manufacturing capacity increased from 2.3 GW in 2014 to about 172 GW as of 31 March 2026.
Total non-fossil fuel capacity reached 283.46 GW, including 274.68 GW of renewable energy capacity.
Highest-ever annual addition of non-fossil fuel capacity recorded at 55.29 GW.
On 29 July 2025, renewable energy sources met 51.5% of India’s electricity demand, the highest monthly share recorded so far.
Policy Architecture Behind the Solar Expansion
A stable policy framework, competitive bidding mechanisms, and long-term targets have helped create a conducive environment for large-scale solar deployment. A set of mutually reinforcing measures has supported India’s solar expansion. These can be broadly grouped into five pillars:
Creating Vision: Climate Commitments and Long-Term Targets
At COP26 in Glasgow, India announced the Panchamrit goals, which include 500 GW of non-fossil fuel capacity by 2030 and net-zero emissions by 2070. These commitments were reflected in India’s updated Nationally Determined Contributions under the Paris Agreement.
Complementing these efforts, Mission LiFE (Lifestyle for Environment) promotes sustainable consumption and encourages citizens to adopt environmentally conscious practices.
Creating Demand: National Missions and Renewable Purchase Obligations
Strong and sustained demand has been central to India’s solar growth. The National Solar Mission established long-term capacity targets and provided an early impetus to solar deployment.
Renewable Purchase Obligations (RPOs) require electricity distribution companies and other obligated entities to procure a specified share of their electricity from renewable sources. RPOs provide long-term market certainty for developers and investors while encouraging greater renewable energy adoption. The RPO trajectory has been notified through 2029–30, with the target for 2026–27, set at 35.95 per cent.
Demand has also expanded beyond utilities and large developers. PM Surya Ghar: Muft Bijli Yojana is encouraging households to adopt rooftop solar systems. Meanwhile, Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) is supporting the adoption of solar pumps and feeder solarisation in the agriculture sector. Together, these initiatives are expanding the market for solar energy and strengthening participation across consumers, farmers, businesses, and power utilities.
Lowering Costs: Competitive Bidding and Tariff Discovery
One of the most significant developments in solar sector has been the decline in power tariffs over the past decade. This was driven by bidding through the e-Reverse Auction mechanism, where developers compete to supply electricity at the lowest tariff.
Procurement agencies such as the Solar Energy Corporation of India (SECI) have played a key role in scaling this transparent tariff discovery mechanism. As more developers participated, the tariffs declined from around ₹18 per unit in 2010 to a record-low of ₹2.44 per unit. This remarkable achievement was attained at the Bhadla Solar Park auction in 2017. This made solar power more affordable and accelerated its adoption across India.
The decline in tariffs has made solar power increasingly affordable. As a result, India has emerged as one of the world’s lowest-cost solar power markets. In 2025, the Levelised Cost of Electricity (LCOE) from utility-scale solar PV stood at USD 35 per MWh, well below the global average of USD 44 per MWh.
