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Solar Energy Industry in India

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India has an enormous potential for solar energy. Since, the majority of the country’s tropical landmass has been located perfectly for peak solar radiation. With the aim to capitalize on the abundant energy sources, the government of India has launched a series of high profile initiatives, which pushed the country’s solar power production. Armed with the excellent result, the Indian Government's Ministry of New and Renewable Energy has pegged the country’s total solar power potential at nearly 750GW, with around 142GW of solar resource available in Rajasthan alone.

Funding and financial assistance:

Apart from the government initiatives, significant financing from commercial and multinational investment banks are driving the growth. In 2017, the European Investment Bank (EIB) joined hands with YES Bank, with each of the banks setting aside $200m in loans to help finance solar and wind projects in the country. EIB also released a $ 214m loan extension to the State Bank of India (SBI) to offer financial assistance to five key grid-scale solar energy projects that are due for completion by 2020. World Bank is committed to provide $ 1 billion for the financial year 2017-18, which is the highest for any country. It should be noted that the World Bank has described India as the best conditions in the world to capture and use solar energy. The bank is also backed the International Solar Alliance, which was formed after the Paris Climate Conference (2015). This was one among the driving force in large-scale solar parks, which helped the government last year doubled its solar park capacity goal from 20GW to 40GW by 2020, with 50 parks planned in the next two years and government investment of $1.2 billion.

State level progress in solar energy :

Apart from Eastern states, all large Indian states have offered their assistance to harness the power of solar energy. There is a good competition from Andhra Pradesh, Gujarat, Madhya Pradesh, Rajasthan, Tamil Nadu, and Telangana to bag the top spot in solar production. But as of April 2018, Karnataka is at the top with Pavagada Solar Park (600 MW capacity). The solar park will reach its full 2 GW installed capacity in another two years and will make it the largest single-site solar plant in the world. But the distinction of the single largest site is currently held by the Kamuthi facility (Tamil Nadu) which has installed capacity of 648 MW.

Solar power in renewable energy sector :

As of February 2018, total installed renewable energy capacity (including large hydro projects) in India touched 107.81 GW, which is around 32.26 per cent of the total energy capacity of the country (334.15 GW). In December 2017, total installed wind power capacity in the renewable combination stood at 32.85 GW (52.27 per cent), while solar power capacity was 17.05 GW (27.13 per cent). Total solar capacity in India is expected to be 8 per cent of global solar capacity by 2035. With the future potential capacity of 363 Gigawatts (GW) and with government renewable energy policies focused, experts predict that Northern India might become the major production for renewable energy in the country in future.

Government initiatives

Some initiatives by the Government of India to boost the Indian renewable energy sector are as follows: The Union Cabinet approval for raising the bonds worth Rs 2,360 crore by the Indian Renewable Energy Development Agency (IREDA), for renewable energy projects in FY 2017-18. A new policy was released for testing, standardization and certification of products used in the renewable energy sector to address quality issues and develop standards as per international practices was released in 2017. Installation of household size biogas plants (4.96 million) through the National Biogas and Manure Management Programme (NBMMP), the Government of India’s decision to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilization. The Ministry of New and Renewable Energy (MNRE) decision to provide custom and excise duty benefits to the solar rooftop sector have been successful in reaching the national solar production goals.


In the early 2017, Solar panel prices moved up. This was due to the manufacturing competition and the possibility of anti-dumping tariffs on Chinese-made panels. One more hurdle, in the form of GST increased the prices on the solar equipment and materials. The Indian industry represents just over 10 per cent of the entire solar module market. Besides, Indian domestic manufacturers aren’t technically and economically strong to compete with Chinese companies. Many top experts have already termed Indian solar PV manufacturing capacity as “outdated and old fashioned”, and various government agencies have been working on a scheme to help build a more advanced and competitive solar manufacturing base. So the nurturing Indian solar panel manufacturing is the key priority. Within a span of years, building domestic capacity and updating the technologies will be the key priority for India. This must be not just for large scale projects and big modules, but also for small scale and rooftop solar. Since they aren’t just price sensitive, but important for India’s solar goals. This is also important, as the rooftop solar help 20 percent of the country’s population which doesn’t have electricity, particularly rural areas.


Promoting solar energy has served several benefits, including the use of clean energy, potential to create many more employments particularly in rural areas. With the Ministry of New and Renewable Energy (MNRE) setting an ambitious target to set up renewable energy capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and other for hydro, bio among others. India must have a huge investment of around US$ 125 billion to reach this target. Though this might seem as an enormous one, use of renewables in place of coal will save India around Rs 54,000 crore (USD 8.43 billion) annually and huge cut in carbon mission and pollution.

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