India’s solar capacity: Milestones and challenges

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India’s solar capacity: Milestones and challenges

  • There is limited financing for residential consumers and Small and Medium Enterprises who want to install rooftop solar systems.
  • India’s focus on large-scale solar PV fails to exploit the many benefits of decentralised renewable energy options.


  • India has now surpassed 50 GW of cumulative installed solar capacity.
  • This is a milestone in India’s journey towards generating 500 GW from renewable energy by 2030, of which 300 GW is expected to come from solar power.
  • India’s capacity additions rank the country fifth in solar power deployment.

Why is India falling short in roof-top solar installations?

  • The rise in large, ground-mounted solar energy is indicative of the strong push towards increasing the share of utility-scale solar projects across the country.
  • The large-scale solar PV focus fails to exploit the many benefits of decentralised renewable energy (DRE) options, including reduction in transmission and distribution (T&D) losses.
  • One of the primary benefits of solar PV technology is that it can be installed at the point of consumption, significantly reducing the need for large capital-intensive transmission infrastructure.
  • India needs to deploy both large and smaller-scale solar PV, and particularly needs to expand RTS efforts.
  • There is limited financing for residential consumers and Small and Medium Enterprises (SMEs) who want to install RTS.
  • Coupled with lukewarm responses from electricity distribution companies (DISCOMS) to supporting net metering, RTS continues to see low uptake across the country.
  • Governments, utilities, and banks will need to explore innovative financial mechanisms that bring down the cost of loans and reduce the risk of investment for lenders.
  • Increased awareness and affordable finance for RTS projects could ensure the spread of RTS across the scores of SMEs and homes around the country.
  • Aggregating roof spaces could also help reduce the overall costs of RTS installations and enable developing economies of scale.

Challenges to India’s solar power capacity addition

  • The utility-scale solar PV sector face challenges like land costs, high T&D losses and other inefficiencies, and grid integration challenges.
  • There have also been conflicts with local communities and biodiversity protection norms.
  • While India has achieved record low tariffs for solar power generation in the utility-scale segment, this has not translated into cheaper power for end-consumers.

State of India’s domestic solar module manufacturing capacity

  • Domestic manufacturing capacities in the solar sector do not match up to the present potential demand for solar power in the country.
  • Backward integration in the solar value chain is absent as India has no capacity for manufacturing solar wafers and polysilicon.
  • Low manufacturing capacities, coupled with cheaper imports from China have rendered Indian products uncompetitive in the domestic market.

Suggestive measures

  • It can be corrected if India embraces a circular economy model for solar systems.
  • It would enable solar PV waste to be recycled and reused in the solar PV supply chain.
  • By the end of 2030, India will likely produce nearly 34,600 metric tonnes of solar PV waste.
  • India could develop appropriate guidelines around Extended Producer Responsibility (EPR)
  • This could give domestic manufacturers a competitive edge and go a long way in addressing waste management and supply-side constraints.


  • As India attempts to deal with some of the shortcomings, India’s solar story will continue to provide important lessons for other developing countries that are looking to transition to clean energy.
  • In addition to an impressive domestic track record, through the International Solar Alliance (ISA) established by India and France at COP-21 in 2015, there is a global platform to bring countries together to facilitate collaboration on issues such as mobilising investments, capacity building, program support and advocacy and analytics on solar energy.
  • Technology sharing and finance could also become important aspects of ISA in the future, allowing meaningful cooperation between countries in the solar energy sector.