India's Solar Capacity Set to Skyrocket

India is on the brink of a solar revolution, with projections indicating an addition of 85-90 GW of solar capacity in the Financial Years 2026 and 2027. This significant leap is supported by the expansion of residential rooftop solar installations, which are playing a crucial role in the sector's growth.

Unprecedented Growth in Solar Installations

The report by SBI Caps highlights that solar capacity additions have reached unprecedented levels, demonstrating resilience to demand fluctuations. It forecasts that solar additions could double to 30 GW in FY25, with annual module demand expected to hit 100 GW.

Challenges and Opportunities Ahead

Despite the optimistic outlook, the realization of these projections depends on several factors, including the reduction of the PPA-PSA gap, the completion of PM-SGMBY by FY28, and enhanced RPO compliance. Challenges such as land constraints, ALCM implementation, and restrictive state net metering policies pose downside risks. However, timely schemes like PM-KUSUM and efficient project execution could further boost demand.

India's Remarkable Solar Journey

India's solar power sector has seen an extraordinary 3450 percent increase in capacity over the past decade, rising from 2.82 GW in 2014 to 100 GW in 2025. As of January 31, 2025, the total solar capacity installed stands at 100.33 GW, with significant contributions from states like Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Madhya Pradesh.

Rooftop Solar and Manufacturing Growth

The rooftop solar sector witnessed remarkable growth in 2024, with 4.59 GW of new capacity installed, a 53 percent increase compared to 2023. The PM Surya Ghar: Muft Bijli Yojana has been a key driver, nearing 9 lakh rooftop solar installations. Additionally, India's solar manufacturing capacity has surged from just 2 GW in 2014 to 60 GW in 2024, establishing the country as a global leader in solar manufacturing.