Can India become the world’s 2nd largest solar power producer in the coming decade?

Synopsis:- India has emerged as the world’s third-largest solar producer, generating 1,08,494 GWh with 119 GW installed capacity. Strong policy support, 500 GW non-fossil targets, rising domestic manufacturing, and flagship solar schemes position the country well to challenge for the second spot, despite storage and demand risks.

Ten years ago, solar power in india was just beginning, with panels seen on only a few rooftops and barren lands. Today, the country has moved far ahead, making rapid progress. Recently, india has officially surpassed Japan to become the world’s third-largest solar power producer. According to the International Renewable Energy Agency (IRENA),  India generated an impressive 1,08494 GWh of solar energy, leaving Japan behind at 96,459 GWh.

As of July 2025, India’s solar power capacity reached 119.02 GW. This includes 90.99 GW from large ground-mounted plants, 19.88 GW from rooftop solar systems, 3.06 GW from hybrid projects, and 5.09 GW from off-grid installations, showing India’s balanced and wide-ranging push toward solar energy.

India’s growth in renewable energy shows the impact of clear policies and long-term planning by the government. After its COP26 commitment, the country is working towards achieving 500 GW of non-fossil power capacity by 2030. This target is a major step in India’s shift to clean energy and meeting its climate goals.

Solar Power Potential

India is located in the tropical zone, and the tropic of cancer passes through several states, giving the country strong sunlight for most of the year. This results in a high solar power potential of about 748 GW. states like Rajasthan, Jammu & Kashmir, Maharashtra, Madhya Pradesh, and Andhra Pradesh lead in solar potential and play a major role in India’s clean energy growth.

By July 2025, India’s solar capacity had grown nearly 4,000%, taking total renewable energy capacity to 227 GW. Palli village in Jammu & Kashmir became India’s first carbon-neutral panchayat by running fully on solar power. The focus is now on energy storage and new technologies, while schemes like PM Surya Ghar and PM Kusum are helping homes and farmers adopt solar energy.

Domestic Solar Manufacturing

India’s solar manufacturing industry covers a key part such as modules, PV cells and ingots, and wafers. Making these components in the country helps the local economy and cuts reliance on imports. In just one year, solar module capacity almost doubled from 38 GW in March 2024 to 74 GW in March 2025, while PV cell capacity jumped from 9GW to 25 GW. The launch of India’s first 2GW ingot-wafer plant marked an important step in building a complete solar supply chain.

This fast growth has been backed by strong government support. Solar projects under schemes like rooftop solar, PM-KUSUM, and CPSU Phase II must now use Indian-made panels and cells. In Addition, the government introduced basic Customs Duty (BCD) in April 2022 on imported solar equipment, making imported solar equipment, making import costlier and encouraging the use of domestic products.

Government Solar Initiatives

The Government has launched several initiatives to promote the adoption and development of solar energy across the country.

PM Surya Ghar Muft Bijlee Yojana aims to make rooftop solar affordable for households with a large outlay of ₹75,021 crore. By offering subsidies of up to ₹78,000 and enabling families to get 300 free units monthly, the scheme reduces power bills and allows households to save around ₹15,000 annually, even after loan repayments.

The PM-KUSUM scheme helps farmers shift from diesel to solar power by offering 30–50% subsidies for solar pumps and conversions. It also allows farmers to set up to 2 MW solar plants on their land, creating extra income by selling power to DISCOMs. The scheme improves farm energy security while supporting India’s 50% non-fossil power target by 2030.

India’s solar park programme is scaling up rapidly, targeting 40 GW by March 2026. So far, 53 parks with nearly 39.3 GW capacity are approved across 13 states, with about 13.9 GW already operational. These large projects are delivering affordable power, supporting grid stability alongside wind energy, and creating rural jobs through clean energy expansion.

PM JANMAN focuses on improving the lives of Particularly Vulnerable Tribal Groups through coordinated efforts across multiple ministries. A key part of this mission is the New Solar Power Scheme, backed by ₹515 crore, which aims to provide electricity to one lakh unelectrified tribal households across 18 states, promoting inclusive growth and sustainable energy access in remote regions.

India’s solar manufacturing story shows rapid and sustained growth. Since 2014, solar PV cell capacity has expanded nearly 21 times to about 25 GW, while module manufacturing has surged over 34 times to around 78 GW by March 2025. This sharp scale-up highlights strong policy support, rising domestic demand, and India’s push to reduce import dependence in clean energy.

• Demand volatility risk: Solar demand depends heavily on government auctions and DISCOM purchases, and any delay, cancellation, or payment stress can slow project execution and capacity additions.
• Storage cost challenge: Battery energy storage remains expensive, and high upfront costs can hurt project viability, especially for standalone solar plants without long-term storage-linked contracts.
• Intermittency risk: Solar power generation is weather-dependent, and without adequate storage, supply-demand mismatches can reduce offtake and limit solar’s role in peak power demand.
• Slow storage adoption: Delays in large-scale storage tenders and unclear regulations may slow adoption, restricting round-the-clock solar solutions and impacting long-term demand growth.

Conclusion

India’s rapid solar expansion, strong policy support, and growing domestic manufacturing place it on a clear path to challenge for the world’s second-largest solar producer position. While storage costs and demand stability remain key hurdles, continued reforms, technology adoption, and investment momentum could help India scale sustainably over the coming decade.

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