India’s solar additions could double to 30 GW in fiscal 2025
A new report by SBICAPS projects India’s annual solar capacity addition to double to 30 GW in fiscal 2025 against 15 GW in fiscal 2024.
The report states the deployment pace will further improve in fiscal 2026 and fiscal 2027, leading to significant spike in module demand. It projects PV deployment for fiscal 2026 at 42 GW and for fiscal 2027 at 46 GW, with residential rooftop solar driving expansion.
Annual module demand is forecast to increase from 50-55 GW in fiscal 2025 to 105 GW in fiscal 2027. [The calculation assumes DC/AC overloading of 1.2-1.4, effective utilization to nameplate capacity ratio of 55% to 65%.]
The report says PV installation projections are likely to be met with moderate PPA-PSA gap reduction, PM Surya Ghar Muft Bijlee Yojana (PM-SGMBY) completion by FY28, and enhanced RPO [renewable energy purchase obligation] compliance. Timely scheme (especially PM-KUSUM) and project execution could further augment demand. On the other hand, land constraints, ALCM [Approved List of Cell Manufacturers] implementation, and restrictive state net metering policies pose as deterrents.
The report says the integration drive needs to kick into next gear to meet ALCM and DCR goals. [DCR solar panels are panels made in India with domestically manufactured cells, meeting the domestic content requirement as stipulated for PV installations under PM Surya Ghar Muft Bijlee Yojana, PM KUSUM and CPSU Phase II Scheme.]
“Despite integration factor (cell/module capacity ratio) likely improving from 32% to 65%, more than half of India’s cell requirements will continue to be imported in FY27, even if all capacities promised come on board,” states the report.
DCR module prices will maintain a premium due to PM-SGMBY-driven demand exceeding cell capacity additions and escalating regulatory stringency on DCR. As cell production expands, wafer and ingot manufacturing emerge as the next strategic imperative, with the government expected to allocate $ 1 billion in incentives to foster domestic ecosystem development.