India’s solar energy sector has emerged as a key pillar of the country’s energy strategy. The National Solar Mission, launched in 2010, followed by a series of policy initiatives and technological investments, has placed solar power at the heart of India’s energy transition. Solar energy is no longer just an environmentally friendly alternative; it is now strengthening energy security, supporting economic growth, and enhancing India’s energy export potential.
Let’s understand the current status of India’s solar energy sector, the installed capacity so far, the state of manufacturing and policy support, the key growth drivers, and what the future may hold for this sector.
Current Status of the Indian Solar Energy Market
India has retained its fourth position globally in wind power, solar power, and total renewable energy installed capacity in FY25, reinforcing its strong global presence. At present, India is one of the fastest-growing renewable electricity markets, and it is estimated that the pace of new capacity additions could double by 2026.
A major milestone in India’s renewable journey is that the country has surpassed Japan to become the world’s third-largest solar energy producer. According to data from the International Renewable Energy Agency (IRENA), India produced 1,08,494 GWh of solar power, significantly higher than Japan’s 96,459 GWh.
Solar power accounts for more than half of India’s total installed renewable energy capacity, exceeding the combined share of all other sources.
As of October 31, 2025, renewable energy accounts for 39.66% of India’s total installed power capacity. Within this renewable portfolio, solar energy has emerged as the most prominent contributor, with capacity reaching 129.92 GW. This represents 64.87% of the total renewable capacity, marking a significant milestone in India’s clean energy transition and strengthening long-term energy security.
Support from Government Policies and Schemes
The rapid growth of India’s solar sector is strongly backed by government policy support. The government has introduced dedicated schemes for the development of Solar Parks and Ultra Mega Solar Power Projects. Currently, more than 50 solar parks have been approved across various states, with a combined capacity of nearly 40 gigawatts. These parks offer developers ready access to land, infrastructure, and grid connectivity, thereby reducing execution challenges.
In addition, the Production Linked Incentive (PLI) scheme has been implemented to promote domestic manufacturing. Significant investments are being directed towards the production of high-efficiency solar PV modules to reduce dependence on imports. Schemes such as the Grid-Connected Solar Rooftop Programme and PM-KUSUM are encouraging farmers and households to adopt solar energy. Together, these initiatives are not only boosting production but also strengthening the overall ecosystem.
PM Surya Ghar Muft Bijli Yojana
To accelerate the adoption of solar energy at the household level, the government launched the PM Surya Ghar Muft Bijli Yojana. The scheme aims to connect 1 crore households with rooftop solar systems. A total outlay of Rs 75,021 crore has been allocated for this large-scale initiative. The objective is to provide up to 300 units of free electricity to households while enhancing their income potential.
Under the scheme, a 60% subsidy is provided for systems up to 2 kW, along with an additional 40% subsidy for the next 1 kW. The total subsidy for a 3 kW system has been capped at Rs 78,000. Data as of December 2025 highlights the scheme’s progress. So far, 23.9 lakh households have adopted rooftop solar under this initiative, contributing 7 GW of clean energy capacity. The government has released Rs 13,464.6 crore in subsidies to date, reflecting steady progress towards the target of 1 crore solar-powered homes.
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Future Prospects
India is moving steadily towards becoming a global clean energy hub in the coming years. The country has set ambitious targets for 2030, including achieving 500 GW of non-fossil fuel-based electricity capacity, ensuring 50% of electricity capacity comes from non-fossil sources, and reducing carbon emissions by 1 billion tonnes. In addition, the commitment to reduce the carbon intensity of the economy by 45% and achieve net-zero emissions by 2070 further reinforces India’s climate goals. To meet these targets, significant emphasis is being placed on energy efficiency, low-carbon technologies, and industrial development.
India has already made meaningful progress. The country has crossed 100 GW of solar capacity, achieved a 47% share of non-fossil electricity capacity, and reduced emission intensity by 36%, indicating progress ahead of schedule. Of the targeted 500 GW renewable capacity by 2030, nearly 280 GW is expected to come from solar energy, potentially unlocking investment opportunities worth approximately US$ 221 billion. This transition is not only reshaping India’s energy mix but also positioning the country as a key player in the global clean energy landscape.
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