India’s solar energy sector has witnessed extraordinary growth, becoming the dominant driver of the country’s renewable energy expansion. As of early 2025, India’s installed solar power capacity has surpassed 100 GW, a monumental increase from just 2.82 GW in 2014, marking a growth of over 3500% in about a decade.
In the fiscal year 2024-25 alone, India added approximately 24 GW of new solar capacity, which is the highest annual increase recorded so far. This expansion includes around 81 GW from ground-mounted projects, 17 GW from rooftop solar systems, nearly 3 GW from hybrid projects, and about 4.7 GW from off-grid solar systems. The rooftop solar segment is also growing rapidly, with a 53% increase in installations in 2024, supported by government initiatives like the PM Surya Ghar Muft Bijli Yojana that aims to make rooftop solar accessible to households.
Solar energy now accounts for nearly 48% of India’s total renewable energy capacity, which reached over 220 GW in 2024-25, contributing significantly to the country’s goal of achieving 500 GW of non-fossil fuel-based energy capacity by 2030. The renewable energy pipeline is robust, with over 169 GW of projects under implementation and 65 GW tendered, including hybrid and round-the-clock power systems that integrate solar with other technologies for stable supply.
Key states leading solar installations include Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Madhya Pradesh, which have contributed substantially to utility-scale solar capacity. India has also made significant strides in solar manufacturing, increasing module production capacity from 2 GW in 2014 to 60 GW in 2024, with ambitions to reach 100 GW by 2030.
Growth Trend in Solar Energy Capacity
The overall installed renewable energy capacity (excluding large hydro) rose from 76.38 GW in 2014 to 203.1 GW in 2024, with solar power constituting a significant share of this growth. Solar capacity peaked at around 97.4 GW in 2024, up from nearly 24 GW the previous year, showing continuous and rapid expansion.
According to the 14th National Electricity Plan (NEP14), solar power’s share in India’s electricity generation mix has increased from 1% in 2018 to 6.3% in FY 2023, and is projected to reach 25% by FY 2032, marking an accelerating growth phase.
Drivers of Growth
Government initiatives such as the PM Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme promote solar-powered irrigation and decentralized solar solutions, boosting adoption in rural and agricultural sectors. Large-scale solar parks, including the Bhadla Solar Park (2,245 MW capacity), have been developed, reducing costs and increasing efficiency. India’s commitment to achieving 500 GW of renewable energy capacity by 2030, with solar power playing a central role, drives policy and investment support. Technological advancements, including the integration of AI and improved solar technologies, support rapid deployment and grid integration.
Economic and Market Outlook
The Indian solar energy market generated USD 10.4 billion in revenue in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 13.4% from 2024 to 2030. Electricity generation from solar energy is projected to reach 104.59 billion kWh in 2025, with an anticipated annual growth rate of 7.5%.
Solar Energy Sector in USA for 2025
Market Growth and Capacity Expansion
The global installed solar capacity reached 495 GW in 2024, marking a 14% increase from the previous year, with projections of continued strong additions of at least 43 GW annually through 2029. In the U.S., 2024 saw record utility-scale solar capacity additions (30 GW), with 2025 expected to add 32.5 GW, led by states like Texas and California. Solar accounted for around 61% of new U.S. power capacity additions in 2024, reflecting its dominant role in renewable energy growth. Despite this growth, solar installations may face a deceleration due to policy uncertainties and declining financial incentives in some mature markets.
Industry and Policy Landscape
The solar industry is adapting to a more uncertain policy environment, with some new governments adopting conservative climate agendas and reducing incentives such as capex rebates and feed-in tariffs.
Governments are increasingly integrating energy transition policies with broader industrial and economic goals, emphasizing jobs, manufacturing, and energy security alongside emissions reduction. Industrial policy and reshoring of clean technology manufacturing are shaping the energy transition, potentially influencing where solar manufacturing hubs emerge.
Technological Innovations
Advances in solar panel technology include tandem and perovskite cells that boost efficiency and energy output, bifacial panels capturing sunlight on both sides, and smart inverters enhancing energy management and storage integration. Integration with advanced battery storage systems (lithium-ion and flow batteries) is improving solar energy utilization, grid stability, and cost-effectiveness. Blockchain technology is gaining traction for enabling secure, transparent peer-to-peer energy trading and optimizing distributed solar resources.
Emerging Demand Drivers
The rapid expansion of data centers, driven by AI and digital technologies, is creating new, significant electricity demand that solar energy is well-positioned to meet through power purchase agreements and off-grid solutions. The solar sector is also responding to challenges such as equipment lead times, interconnection bottlenecks, and supply chain constraints with efforts to strengthen domestic supply chains and streamline permitting.
Market Rationalization and Pricing
After years of low solar panel prices due to overcapacity, 2025 is expected to see manufacturers limit production and establish minimum pricing agreements, potentially leading to a seller’s market and price stabilization or increases.
Solar Energy Sector facing challenges:
Grid Integration and Infrastructure
Rapid growth in large-scale solar farms is putting significant pressure on existing grid systems, many of which are not designed to handle the variability and intermittency of solar power. There is an urgent need for grid modernization and advanced energy storage solutions to stabilize output, but these require substantial investment and long-term planning.
Regional disparities in grid infrastructure, especially in developing areas, further complicate large-scale solar deployment.
Workforce Shortages and Skills Gap
The demand for skilled operations and maintenance (O&M) personnel is outpacing supply, creating bottlenecks in ensuring reliable and efficient solar farm operations. Training programs are struggling to keep up with the need for expertise in emerging technologies like AI-driven monitoring, drones, and predictive analytics. High turnover rates and difficulty retaining experienced technicians exacerbate this challenge.
Supply Chain Disruptions
Persistent supply chain issues, including shortages of critical materials like polysilicon and delays in shipping components such as inverters and batteries, are causing project delays and cost increases. Geopolitical tensions and over-reliance on a limited number of suppliers make the industry vulnerable to price volatility and supply interruptions. The need for scalable recycling frameworks is growing as more solar panels reach end-of-life, but current recycling systems are inadequate.
Technological Fragmentation and Integration
The diversity of solar panel types, inverters, and monitoring systems leads to challenges in standardizing maintenance and system upgrades. Integrating legacy systems with modern IoT and AI platforms requires significant technical expertise and investment, leading to interoperability issues.
Economic and Financial Constraints
Securing funding for large-scale solar projects remains challenging, especially in volatile economic climates. Financial uncertainty, changing interest rates, and evolving government incentives impact project viability and investor confidence.
Policy and Regulatory Uncertainty
Shifts in government policies, such as changes to net metering or renewable incentives, can create uncertainty and affect the pace of solar adoption. Navigating diverse and evolving regulatory environments adds complexity for developers and investors.
Sustainable Lifecycle Management
Managing the environmental impact of solar panel manufacturing, transportation, and end-of-life disposal is increasingly important. Developing cost-effective and scalable recycling infrastructure, prolonging panel lifespans, and reducing the carbon footprint of the supply chain are ongoing challenges.
Environmental and Social Considerations
Solar projects may face local opposition due to environmental or social concerns, leading to delays and increased costs. Proactive community engagement and thorough environmental assessments are necessary to address these issues.
Leading photovoltaic (PV) cell technology companies and manufacturers worldwide:
