India Solar Photovoltaic (PV) Market Outlook to 2028

India Solar Photovoltaic (PV) Market Overview

The India Solar Photovoltaic (PV) market is valued at 18 GW, based on a five-year historical analysis. This rapid growth is driven by several factors, including government initiatives such as the National Solar Mission and decreasing solar PV installation costs. The solar energy sector in India is gaining momentum, fueled by the countrys need to meet its growing energy demands sustainably. Solar PV systems have become more economically viable due to technological advancements and increasing production scale, making them a key contributor to the countrys energy mix.

Indias solar PV market is dominated by regions such as Gujarat, Rajasthan, and Karnataka, primarily due to favorable climatic conditions and government policies supporting solar infrastructure development. Gujarat, for instance, benefits from abundant sunlight and robust grid infrastructure, while Rajasthans large-scale solar parks make it a frontrunner in solar energy production. These states have become solar powerhouses due to their proactive policies and resource availability, positioning them as dominant forces in the Indian solar PV market.

Indias solar market is heavily reliant on Power Purchase Agreements (PPAs), which determine the price and terms of solar energy sales. By 2023, state-run utilities like NTPC had signed long-term PPAs at tariffs as low as INR 1.99 per k Wh, ensuring low-cost electricity for consumers. PPA regulations vary across states, but the central government has issued guidelines to standardize contracts and minimize risks for developers. These agreements provide stability for large-scale solar projects, ensuring consistent revenue streams and fostering investor confidence in the sector.

India Solar Photovoltaic (PV) Market Segmentation

By Product Type: Indias Solar Photovoltaic (PV) market is segmented by product type into Monocrystalline PV, Polycrystalline PV, and Thin-Film PV. Recently, Monocrystalline PV systems have emerged as the dominant market segment. This is attributed to their higher efficiency rates and longer lifespan compared to polycrystalline and thin-film variants. Although monocrystalline systems are more expensive to manufacture, their increased energy output in smaller spaces has made them the preferred choice, especially in urban areas with limited rooftop space. This segment is further boosted by demand in commercial and industrial sectors where energy efficiency is paramount.

By Application: The Indian Solar PV market is also segmented by application into Utility-Scale Solar, Rooftop Solar, and Off-Grid Solutions. Among these, Utility-Scale Solar holds the dominant share, driven by massive government-led initiatives and large-scale solar farms. Utility-scale solar installations have been instrumental in meeting the countrys renewable energy targets. States like Rajasthan and Gujarat are home to vast solar farms, contributing heavily to this segment's growth. Additionally, the availability of large, unutilized land banks and favorable policies for land acquisition make it an attractive proposition for developers.

India Solar Photovoltaic (PV) Market Competitive Landscape

The India Solar PV market is dominated by a few key players, including Tata Power Solar, Adani Solar, and Vikram Solar. These companies have established themselves as major forces in the market through large-scale solar farm installations and rooftop projects. Additionally, international players like First Solar and Canadian Solar have penetrated the Indian market, leveraging technology advancements and partnerships with local developers. The consolidation of the market underscores the significant influence of these firms, especially as they benefit from government-backed incentives, superior supply chains, and technological expertise.

Company Name

Establishment Year

Headquarters

Installed Capacity (GW)

Revenue (USD Billion)

No. of Employees

R&D Investments

Geographical Presence

Strategic Partnerships

Tata Power Solar

1989

Mumbai, India______

Adani Solar

2015

Ahmedabad, India______

Vikram Solar

2006

Kolkata, India______

First Solar

1999

Arizona, USA______

Canadian Solar

2001

Ontario, Canada______

India Solar Photovoltaic (PV) Industry Analysis

Growth Drivers

Government Policies: Indias solar photovoltaic (PV) market has benefited significantly from government policies. The National Solar Mission, launched in 2010, has led to a target of achieving 100 GW of solar capacity by 2022. By 2023, India surpassed 63 GW of installed solar capacity, with additional support from various state-level subsidies. For example, under the Kusum Scheme, INR 34,422 crore was allocated to support solar power generation for farmers. These measures, along with solar tariffs as low as INR 1.99 per k Wh, have driven rapid growth in the sector, making solar energy more affordable and accessible.

Declining Solar PV Costs: The declining cost of solar PV modules is a key driver in Indias market expansion. By 2023, solar PV module costs had fallen to around INR 20-24 per watt, making solar more competitive with conventional energy sources. Economies of scale, driven by increased domestic manufacturing and imports, have further reduced costs. The PLI (Production Linked Incentive) scheme, introduced in 2021, allocated INR 4,500 crore to encourage domestic manufacturing, thereby reducing import dependence and costs. The cost reduction makes it economically viable for larger installations and promotes industrial uptake.

Renewable Energy Targets: Indias renewable energy ambitions are central to its solar PV market growth. As of 2024, the nations renewable energy target stands at 175 GW of total capacity, of which 100 GW is from solar power. By 2023, India had reached 63 GW of installed solar power capacity. The government also plans to further increase this capacity to 280 GW by 2030. Such ambitious targets, paired with regulatory support, have driven investment in the solar sector from both public and private players. These targets underscore Indias commitment to reducing its carbon footprint while ensuring energy security.

Market Challenges

Land Acquisition Issues: Land acquisition has emerged as a significant challenge in Indias solar market, particularly in densely populated areas. Solar projects require large tracts of land, often leading to disputes over land ownership and use. By 2023, approximately 4 acres per MW were required for solar installations, and securing such land led to delays in commissioning projects. Legal complications and high land prices have also added to the complexity, especially in states like Maharashtra and Tamil Nadu, where competition for land is high. These issues have constrained the expansion of utility-scale solar farms.

High Initial Investment: Solar PV projects in India face high capital expenditure, despite the decline in solar module costs. As of 2023, utility-scale solar plants required an average investment of INR 4.5 crore per MW, making initial investment a challenge for smaller developers. Financing remains constrained due to high interest rates and limited availability of long-term credit. Many financial institutions still perceive solar projects as risky, slowing down the disbursement of funds. This challenge is particularly pronounced for rooftop solar projects, which often face difficulty in securing financing.

India Solar Photovoltaic (PV) Market Future Outlook

Over the next five years, the Indian Solar Photovoltaic (PV) market is expected to show significant growth, driven by government policies, falling solar module prices, and increased demand from the industrial sector. As India continues to push toward its ambitious renewable energy targets, solar PV is set to play a crucial role in meeting energy needs. The expansion of both utility-scale projects and rooftop installations will likely contribute to this growth, along with emerging technologies such as floating solar and hybrid solar-wind systems.

Opportunities

Energy Storage Integration: Energy storage systems, especially battery integration, offer significant opportunities for the Indian solar PV market. With the growing intermittency of renewable energy, Indias battery storage market is projected to expand, with a demand of 27 GWh for grid-scale storage by 2025. Solar-plus-storage projects can improve grid stability and provide power during non-sunlight hours. By 2023, companies like Tata Power and NTPC had started integrating large-scale battery storage with solar farms. Hybrid systems, combining solar with wind or conventional sources, also present an opportunity to ensure continuous energy supply.

Rooftop Solar Market Expansion: Indias rooftop solar market has shown tremendous growth potential, particularly in the residential and commercial sectors. By 2023, rooftop installations accounted for over 7 GW of the total solar capacity in India. The governments rooftop solar subsidy scheme provides up to 40% subsidy for residential installations under 3 k W, reducing the cost burden on consumers. States like Gujarat have led in rooftop solar adoption, with over 100,000 households equipped with solar panels. The commercial and industrial sectors also present opportunities as businesses look to reduce energy costs by switching to rooftop solar systems.
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