India Solar Power Market Outlook to 2031

In 2025, India’s solar power capacity witnessed remarkable growth, reaching 135.81 GW, compared with 97.86 GW in 2024, representing a 38.8% year-on-year increase. Supported by strong government policies, rising investments, and expanding domestic manufacturing, solar power has become an important part of India’s renewable energy transition and the country’s fastest-growing renewable energy source.

This rapid expansion aligns with India’s ambitious renewable energy targets under its Panchamrit commitments, including 500 GW of non-fossil fuel-based installed capacity by 2030. Solar power is expected to contribute significantly toward achieving this target and expanding India’s clean energy capacity.

In addition, India aims to meet 50% of its cumulative electricity requirements from renewable energy by 2030 and achieve net-zero emissions by 2070. These targets are expected to support continued investments in solar generation, grid infrastructure, energy storage, and domestic manufacturing, creating further growth opportunities for the Indian solar power market.

Market Overview

India’s solar power market is expanding rapidly, supported by ambitious renewable energy targets, supportive government policies, rising investments, and growing domestic manufacturing. India's installed solar capacity increased from 2.82 GW in 2014 to 135.81 GW by the end of 2025. The country's solar capacity continued to expand, reaching approximately 162.15 GW as of June 2026. Solar now accounts for nearly 55% of India’s total renewable energy capacity, reflecting its growing contribution to the country’s electricity supply. 

Beyond utility-scale projects, rooftop solar is also gaining momentum, supported by the PM Surya Ghar: Muft Bijli Yojana, which targets rooftop installations for 1 crore households by FY2026-27. By March 2025, the scheme had benefited more than 11 lakh households, with INR 5,437 crore in central financial assistance disbursed.

From a market scope perspective, the India solar power market covers the complete value chain, including PV cell and module manufacturing, project development, EPC, power generation, installation, and O&M services. This makes the market a combination of manufacturing, infrastructure, electricity generation, and lifecycle services.

Drivers

Government Initiatives and Regulatory Support 

Supportive government policies and ambitious renewable energy targets are major drivers of India’s solar market. Government initiatives, financial incentives, domestic manufacturing policies, and investments in grid infrastructure are accelerating solar deployment across utility-scale, rooftop, and agricultural applications.

As part of this broader policy support, India is placing greater emphasis on domestic solar manufacturing to reduce import dependence and strengthen supply chains. The Production Linked Incentive (PLI) scheme, Approved List of Models and Manufacturers (ALMM), and domestic sourcing requirements are encouraging the development of local PV cell and module manufacturing capacity, which helps improve supply-chain resilience.

The impact of these measures is evident in the rapid expansion of domestic manufacturing capacity. India’s ALMM-listed solar module manufacturing capacity increased from just 2.3 GW in 2014 to 100 GW by August 2025. This significant expansion highlights the growing role of government policies in strengthening domestic solar manufacturing and reducing reliance on imports.

Alongside manufacturing expansion, the growth of the solar sector is also attracting significant investment and financing. Capital is flowing from public-sector banks, private investors, infrastructure funds, and green financing instruments, while institutions such as the Indian Renewable Energy Development Agency Limited (IREDA) are expanding renewable-energy financing. In FY2024-25, IREDA’s loan sanctions increased 27% to INR 47,453 crore, while disbursements rose 20% to INR 30,168 crore.

Restraints

Despite strong policy support and significant growth potential, India’s solar power market faces several challenges that can affect project development, costs, and deployment timelines. Land availability, grid integration, energy storage, domestic supply-chain gaps, financing requirements, and waste management remain key factors that could limit the pace of market expansion.

Among these challenges, land availability is a major constraint for utility-scale solar projects. Large projects require significant contiguous land, creating competition with agriculture, urban development, and ecological conservation. Land acquisition, permitting, and community concerns can further delay project development.

For example, a 500 MW solar project in Aurad, Bidar, Karnataka, was scrapped in 2025 after authorities secured consent for only around 200 acres of the 2,000 acres required, with farmers rejecting the proposed compensation. This highlights how land availability and local stakeholder concerns can delay or prevent large-scale solar projects.

Beyond land constraints, the intermittent nature of solar power creates challenges for grid integration. Solar generation is concentrated during daylight hours, while electricity demand continues after sunset, increasing the need for energy storage to shift excess daytime generation to peak-demand periods. India is expected to require around 236 GWh of BESS capacity by 2031-32, highlighting the significant storage requirement for supporting large-scale solar integration.

For example, Maharashtra State Electricity Distribution Company Limited (MSEDCL) planned a INR 20,000 crore battery-storage project to store surplus solar power generated under its 16 GW solar program and supply it during peak evening and nighttime demand. Such projects demonstrate the increasing importance of battery energy storage systems in managing solar intermittency and improving the reliability of renewable power.

Market Opportunity

India has an estimated 102.18 GWp of floating solar potential, creating opportunities to develop projects on reservoirs while reducing land-use constraints. Co-locating floating solar with hydropower projects can further improve project economics by enabling the use of existing transmission and grid infrastructure.

Beyond water-based projects, India also has significant potential for large-scale ground-mounted solar. The estimated 3,343.37 GWp ground-mounted potential provides substantial scope for utility-scale projects, particularly in states such as Rajasthan, Maharashtra, Andhra Pradesh, and Gujarat, which offer favorable land availability and solar resources.

To address land constraints further, agrivoltaics offers an emerging dual-use opportunity by combining solar generation with agricultural activities on the same land. This approach can complement PM-KUSUM and support the development of decentralized solar projects in rural areas.

In addition to land-based opportunities, the growing green hydrogen sector is creating a new source of demand for solar power. India’s expanding green hydrogen ecosystem requires low-cost renewable electricity, creating opportunities for dedicated solar projects and integrated solar-hydrogen facilities supplying power to electrolyzers.

Segment Analysis

The India solar power market is segmented on the basis of project type into ground-mounted solar, grid-connected rooftop solar, off-grid solar, and hybrid projects. Currently, ground-mounted solar dominates the market, accounting for the largest share of cumulative installed capacity, followed by grid-connected rooftop solar, while off-grid and hybrid projects represent smaller but growing segments.

Ground-Mounted Solar

Ground-mounted solar is the dominant segment, accounting for approximately 74.47% of India’s total solar capacity. The segment primarily consists of large utility-scale projects and solar parks, supported by India’s large land availability and high solar irradiation. With its extensive installed base and established project ecosystem, it remains the most mature segment of the Indian solar market.

Grid-Connected Rooftop Solar

Following ground-mounted projects, grid-connected rooftop solar represents the second-largest segment, accounting for around 18.68% of total solar capacity. It includes residential, commercial, industrial, and government installations and is being supported by initiatives such as PM Surya Ghar: Muft Bijli Yojana. The segment is gaining importance as distributed solar adoption expands across consumer categories.

Off-Grid Solar

Beyond grid-connected applications, off-grid solar serves areas and applications where access to the electricity grid is limited or unavailable. The segment accounts for approximately 3.96% of total capacity and includes solar pumps, decentralized systems, and other standalone applications. Agricultural applications, particularly solar-powered irrigation, represent an important area of deployment.

Hybrid Projects

Alongside these standalone solar applications, hybrid projects are emerging as a means of improving renewable power integration. Solar capacity within hybrid projects represents around 2.89% of total installed capacity. These projects typically combine solar with other renewable technologies, particularly wind energy, helping improve generation consistency and optimize the use of transmission infrastructure.

Regional Analysis

Rajasthan

Rajasthan dominates the Indian solar power market, accounting for approximately 27% of the country’s installed solar capacity. The state’s leadership is supported by abundant solar irradiation, large land availability, and major utility-scale projects, including large solar parks.

Gujarat

Following Rajasthan, Gujarat is the second-largest solar market, accounting for approximately 20% of India’s installed solar capacity. Its strong renewable-energy infrastructure, industrial demand, and large-scale solar developments continue to strengthen its position in the market.

Maharashtra

Maharashtra ranks third, representing approximately 12% of India’s installed solar capacity. The state has a diversified solar market, supported by utility-scale projects, rooftop installations, and decentralized solar deployment.

Tamil Nadu

Tamil Nadu follows Maharashtra as the fourth-largest solar market, accounting for approximately 9% of India’s installed solar capacity. Its strong renewable-energy ecosystem, favorable solar resources, and established power infrastructure continue to support capacity expansion.

The Rest of India

Beyond these four leading states, the rest of India, comprising all other states and Union Territories, accounts for approximately 32% of India’s installed solar capacity. Growing investments in utility-scale, rooftop, agricultural, and decentralized solar projects are expected to support continued capacity expansion across these regions.

 

Trends and Developments

• Solar projects are increasingly being combined with wind power and Bess to provide more predictable power output. This trend is particularly important for meeting demand during non-solar hours and improving the utilization of transmission infrastructure.

• Alongside this shift toward integrated renewable projects, India’s expanding green hydrogen ecosystem is creating a new source of demand for renewable electricity. India aims to produce 5 million tonnes of green hydrogen annually by 2030, creating opportunities for dedicated solar projects supplying electricity to electrolyzers.

• At the same time, solar deployment is becoming increasingly decentralized, with rooftop and distributed projects gaining importance alongside utility-scale installations. PM Surya Ghar has accelerated residential adoption, with 9.57 GW of rooftop capacity added under the scheme by March 20, 2026. Distributed solar additions also reached a record 16.31 GW in FY2025-26.

• The growing deployment of solar is also driving expansion across the domestic manufacturing value chain. India’s solar cell manufacturing capacity reached around 30 GW by mid-2026, supported by the PLI scheme and domestic sourcing requirements, reflecting the country’s shift toward a more self-reliant solar manufacturing ecosystem.

• This broader expansion is also strengthening demand from commercial and industrial (C&I) consumers. Businesses are increasingly adopting rooftop, captive, and open-access solar to reduce electricity costs and meet renewable-energy targets, encouraging developers to offer more customized power procurement and financing models.

The new report from Blackridge Research on the India Solar Power Market comprehensively analyzes the market and provides deep insight into the current and future state of the industry. 

The study examines the drivers, restraints, and regional trends influencing India's solar power market demand and growth.

The report also addresses present and future market opportunities; market trends, developments, and important commercial developments; trends, regions, and segments poised for fastest growth; competitive landscape; and market share of key players.

Further, the report will also provide the India solar energy power market, demand forecast, and growth rates.

What do we cover in the report?

India Solar Power Market Drivers & Restraints

The study covers all the major underlying forces that help the market develop and grow and the factors that constrain the growth.

The report includes a meticulous analysis of each factor, explaining the relevant, qualitative information with supporting data. 

Each factor's respective impact in the near, medium, and long term will be covered using Harvey balls for visual communication of qualitative information and functions as a guide for you to analyze the degree of impact.

India Solar Power Market

This report discusses the overview of the market, latest updates, important commercial developments and structural trends, and government policies and regulations.

India Solar Power Market and Demand Forecast

The report provides India's solar power market size and demand forecast until 2031, including year-on-year (YoY) growth rates and CAGR.

India Solar Power Market Analysis

The report examines the critical elements of the India solar power industry supply chain, its structure, and participants.

Using Porter's five forces framework, the report covers the assessment of the Indian solar power market industry's state of competition and profitability.

India Solar Power Market Segmentation & Forecast

The report dissects the Indian solar power market into various segments. A detailed summary of the current scenario, recent developments, and market outlook will be provided for each segment.

Further, market size and demand forecasts will be presented along with various drivers and barriers for individual market segments.

Effective market segmentation enables you to identify emerging trends and opportunities for long-term growth. Contact us for a "bespoke" market segmentation to better align the research report with your requirements.

Regional Market Analysis

The report covers detailed profiles of major countries across the world. Each country's analysis covers the current market scenario, market drivers, government policies & regulations, and market outlook.

In addition, market size, demand forecast, and growth rates will be provided for all regions.

Following are the notable states covered under each region.

Rajasthan

Gujarat

Maharashtra

Tamil Nadu 

The Rest Of India

Key Company Profiles (Utilities)

This report presents detailed profiles of key companies operating in the Indian solar power market, including Adani Green Energy, Tata Power Solar, NTPC Green Energy, ACME Solar, Avaada Energy, and Azure Power. Each company profile includes an overview, key products and services, financial overview, and recent developments.

Key Company Profiles (Solar PV Manufacturers)

This report presents detailed profiles of key solar PV manufacturers operating in the Indian solar power market, including Waaree Energies Ltd, Vikram Solar, Adani Solar, and Premier Energies. Each company profile includes a company overview, product portfolio, manufacturing capabilities, financial overview, and recent developments.

Competitive Landscape

The report provides a comprehensive list of notable companies in the market, including mergers and acquisitions (M&As), joint ventures (JVs), partnerships, collaborations, and other business agreements.

The study also discusses the strategies adopted by leading players in the industry.

Executive Summary

The executive summary will be jam-packed with charts, infographics, and forecasts. This chapter summarizes the findings of the report crisply and clearly.

The report begins with an executive summary chapter and ends with conclusions and recommendations.

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