Vibha Dhawan Writes: Policy Landscape Has Prioritised Solar Energy

India’s solar sector is entering a golden era. In early 2025, the country surpassed 100GW of installed capacity—a critical milestone on its path toward a 2030 target of 500GW of non-fossil generation capacity.

This achievement is not merely a numerical triumph; it symbolises India’s decisive leap toward sustainable energy security and global renewable leadership. Yet, while we celebrate this milestone, we must also understand the drivers behind this growth and what is needed to scale deployment even faster.

India’s remarkable ascent from 2.8GW in 2014 to 100GW in 2025 is the result of a well-coordinated blend of visionary policy, strategic financing and technological innovation.

The journey began with the Jawaharlal Nehru National Solar Mission in 2010, which set an initial target of 20GW by 2022. Over the years, initiatives like renewable purchase obligation, waiver of inter-state transmission charges, dedicated solar parks, production-linked incentives (PLIs) for solar, etc, laid the foundation for a transformation.

Growth Drivers

India’s policy landscape has aggressively prioritised solar energy. The National Electricity Plan 2023 not only charts a course for generation capacity but also outlines massive transmission expansion to handle peak demand—projected at 458GW by 2032—and to evacuate 365GW of solar energy by 2032.

Complementary measures include extending interstate transmission charge waivers for solar and wind projects through 2025, implementing single-window clearances and streamlining permitting processes, all of which have significantly improved project economics.

Investment in India’s renewables is surging. Foreign direct investment (FDI) in the sector jumped 50% year-on-year in financial year 2024, reaching $3.76bn, with a cumulative $17bn invested since 2010 to fund solar parks, module factories and innovative start-ups. The rise of green bonds has further transformed financing.

Favourable lending terms and strong private-sector commitments have spurred competitive bidding and provided ample capital for solar projects, making investment in Indian solar sector both sustainable and profitable.

A dramatic fall in solar tariffs underpins India’s explosive growth. Over the past decade, tariffs dropped by more than 85%, making solar the cheapest new source of electricity.

Economies of scale, technological advancements and early plug-and-play initiatives—such as mega solar parks like Bhadla and Pavagada—have further driven down costs. Improvements in module efficiency from roughly 14% a decade ago to over 20% today have only enhanced solar’s cost advantage.

Towards Self-Reliance

As India rapidly expands solar installations, it is also accelerating efforts to localise the entire solar manufacturing value chain—from polysilicon to modules. Historically reliant on imports, primarily from China, India has significantly boosted domestic solar module production to around 80GW annually, aided by PLI schemes, import tariffs and guaranteed domestic demand.

However, significant gaps remain, particularly in upstream polysilicon refining and wafer manufacturing, due to high capital investment and longer development cycles. To address this critical dependency, the government launched the Rs 343bn National Critical Minerals Mission in January 2025, focusing on domestic exploration, processing, recycling and international partnerships for critical raw materials.

India’s solar ascent, while impressive, faces headwinds.

Grid integration remains one of the most pressing issues. The intermittent nature of solar power requires robust and flexible grids, coupled with substantial energy storage capabilities. India’s installed storage capacity is currently minimal compared to its ambitious renewable goals.

The Central Electricity Authority estimates India needs 411.4GWh of storage capacity by 2032, compared to a current capacity of less than 1GWh, highlighting a vast gap that needs urgent addressing through targeted policy and investment.

The financial instability of India’s distribution companies presents another hurdle. Delayed payments and inefficiencies in operations, along with lags in signing power purchase agreements after project awards, dampen investor confidence.

High population density and competing land uses complicate the acquisition of large tracts of land for solar projects. Solutions like floating solar, agro-photovoltaics and expanded rooftop installations offer promising alternatives.

Turbocharging the Journey

To achieve 280–365GW by 2030 and beyond, India must nearly triple its current deployment rate—from around 24GW in 2024 to 30–40GW annually. This scaling requires maintaining low tariffs, ensuring high installation quality and adopting high-efficiency panels with bifacial modules to maximise output per GW installed.

Additionally, large-scale deployment of energy storage—such as battery systems, pumped hydro and concentrated solar thermal storage—will be critical to support the growing share of renewables, lower costs and enhance grid reliability.

Scaling beyond 300GW is not just an infrastructure challenge—it’s a nation-building exercise that will create jobs in manufacturing, installation and maintenance, and drive the development of a skilled workforce.

Already, solar power is transforming remote villages, supporting irrigation and powering urban backup systems. By 2030, with renewables supplying 40–50% of India’s electricity, significant carbon emissions reductions will be realised, easing climate impacts and reducing oil and coal import bills.

The vision is clear: a global solar superpower that lights up millions of homes and industries with clean energy. Now is the time to accelerate—scaling up solar installations and energy storage systems to own our energy destiny and set an example for the world.

The writer is director general, The Energy and Resources Institute