Analysis of the Solar Energy Market in India: Future Prospects and Competitive Landscape from 2017 to 2022 and 2023 to 2030

Representational image. Credit: Canva

According to recent reports, India’s renewable energy (RE) sector has experienced a remarkable growth rate of 14% over a five-year period, spanning from FY 2017 to FY 2022. This growth has propelled the country to achieve a significant milestone, reaching a total RE capacity of 114 GW as of September 2022. Notably, solar power constitutes approximately 51% of this overall capacity.


Over the past decade, the share of solar installations in India has exhibited a remarkable compound annual growth rate (CAGR) of 29%, soaring from 4% in FY 2012 to 51% by September 2022. This surge in solar adoption has positioned India as a prominent player in the global solar energy landscape.

India currently boasts a solar installed capacity of 57 GW, with several states making substantial contributions. Among them, Rajasthan leads with 15 GW, followed by Gujarat with 8 GW, Karnataka with 7.7 GW, Tamil Nadu with 5.8 GW, and Telangana with 4.6 GW. Collectively, these states drive nearly 69% of the country’s solar installations, showcasing their commitment to renewable energy.

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The transformation witnessed in India’s solar energy sector can be attributed to the proactive approach of the Government of India (GOI), which has implemented aggressive capacity targets, dedicated policies, and regulatory support. Notably, the GOI has set an ambitious target of achieving 280 GW of solar capacity by 2030, representing a fivefold increase in solar installed capacity over the next seven years. This target demonstrates India’s commitment to transitioning to clean and sustainable energy sources.

The projected growth in solar capacity addition signifies a vast business opportunity across the entire solar value chain, with manufacturing at the forefront. To foster a robust manufacturing base for solar PV modules, the GOI has introduced the Production Link Scheme (PLI). In the Union Budget 2022-23, announced on February 1st, 2022, an allocation of INR 19,500 crore (Tranche II) was earmarked for the PLI, aimed at incentivizing the manufacturing of high-efficiency modules. The scheme prioritizes fully integrated manufacturing units that span from polysilicon to solar PV modules.

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The Solar Energy Corporation of India (SECI) floated a proposal in September 2022, inviting bids under the PLI scheme, signaling a strong push for domestic solar manufacturing. It is anticipated that the PLI scheme will facilitate an installed manufacturing capacity of 65 GW per annum (Tranche II) in India, significantly boosting the country’s manufacturing capabilities. Currently, the domestic capacity for manufacturing solar modules stands at approximately 20 GW, of which 13.3 GW is enlisted in the Approved List of Models and Manufacturers (ALMM). Additionally, the current capacity for manufacturing solar cells in India stands at around 4 GW

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