In-Depth
India has positioned itself as a global leader in renewable energy, with solar power at the heart of its transition to a cleaner, more sustainable energy system. As part of its renewable energy goals, India aims to achieve 500 GW of non-fossil fuel capacity by 2030, with solar energy playing a significant role in this effort. The National Institute of Solar Energy (NISE) has assessed the country’s solar potential at 748 GW, based on utilising just 3% of its wasteland for solar PV modules.
Solar energy has been central to India's National Action Plan on Climate Change, with the National Solar Mission (NSM), launched in January 2010, serving as a cornerstone of the government’s efforts. The NSM aims to promote ecologically sustainable growth while strengthening India's energy security. The mission’s goal is to establish India as a global leader in solar energy, creating the policy framework necessary to accelerate solar technology adoption across the nation. This aligns with India's Nationally Determined Contributions (NDCs) under the Paris Agreement, which target 50% of the country’s cumulative installed electric capacity to come from non-fossil fuel-based energy resources by 2030, alongside reducing its emission intensity by 45% from 2005 levels.
India's solar energy sector is dominated by big players such as Tata Power Solar Systems, ReNew Power, Azure Power, Waaree Energies, and Adani Solar. Tata Power, with 3.9 GW of clean energy capacity and the highest revenue at $7.38 billion in 2024, aims for 80% clean energy by 2030. ReNew Power has a total capacity exceeding 13.4 GW, with 7.7 GW commissioned. Azure Power, which developed India's first utility-scale solar project in 2009, has over 3 GW operational capacity. Waaree Energies is India's largest solar panel manufacturer with 12 GW capacity, while Adani Solar is the largest vertically integrated manufacturer of solar cells and panels with 4 GW manufacturing capacity in Gujarat.
Policies and incentives
One of the central pillars of India’s solar power strategy is the National Solar Mission, which sets ambitious targets for solar energy deployment. In pursuit of these goals, several schemes have been introduced like the Solar Park Scheme, the Viability Gap Funding (VGF) Scheme, and the Grid Connected Solar Rooftop Scheme. These initiatives focus on expanding large-scale solar installations, ensuring grid connectivity, and supporting rooftop solar adoption, particularly in urban and semi-urban areas. Additionally, in the Union Budget 2024-25, the government has set aside ₹10,000 crore ($1.2 billion) for the Centrally Sponsored Scheme for Solar Power (Grid), which is a 110% increase from the ₹4,757 crore ($570 million) allocated in the previous budget.
Moreover, the Indian government has opened the door to 100% Foreign Direct Investment (FDI) in the solar sector under the automatic route to simplify the entry process for foreign investors. To further ease the financial burden, the government has waived Inter-State Transmission System (ISTS) charges for solar projects commissioned before June 2025. The introduction of Renewable Purchase Obligations (RPO), which mandates a certain percentage of energy consumption to come from renewable sources by 2030, also reflects a long-term commitment to clean energy.
The Production Linked Incentive (PLI) Scheme is an initiative that targets the domestic manufacturing of high-efficiency solar PV modules. With an outlay of ₹24,000 crore ($2.88 billion), this scheme incentivizes solar manufacturers for five years based on the production and sale of high-efficiency solar PV modules.
The government has taken steps to ease investment hurdles. For instance, single-window clearance mechanisms streamline bureaucratic processes, while simplified land acquisition policies make it easier for investors to secure land for solar projects. The imposition of a Basic Customs Duty (BCD) on the import of solar PV cells and modules from April 2022 further encourages the use of domestically produced components, aligning with India’s Make in India initiative. This policy is complemented by the Domestic Content Requirement (DCR) under various government subsidy programs, ensuring a preference for locally sourced solar equipment.
Solar states
India's solar energy landscape is characterised by a diverse geographical spread, with certain regions emerging as important hubs for solar power generation. States like Gujarat, Rajasthan, Karnataka, Maharashtra and Tamil Nadu have witnessed growth in solar projects, driven by policies, solar resources, and investments.
Andhra Pradesh has a solar potential of 38,440 MWp, offering opportunities for harnessing solar energy due to its sunny climate and open spaces. Arunachal Pradesh, despite its hilly terrain, has a solar potential of 8,650 MWp, indicating the potential for solar projects in higher altitudes. Assam has a capacity of 13,760 MWp, positioning itself as a state for solar expansion in the northeast.
Bihar has a solar potential of 11,200 MWp, reflecting the state's growing interest in renewable energy to address its energy deficit. Chhattisgarh, with a solar potential of 18,270 MWp, offers prospects for solar development, particularly in its rural areas.
Smaller states like Goa still contribute to India’s renewable energy goals, albeit with a modest solar potential of 880 MWp. Gujarat, a leader in solar energy, offers a high potential of 35,770 MWp, making it one of the most attractive destinations for solar investments.
Moving north, Haryana has a solar potential of 4,560 MWp, while Himachal Pradesh offers a robust potential of 33,840 MWp, suitable for developing solar parks in its valleys. Jammu & Kashmir is notable for its immense solar potential of 111,050 MWp, primarily in its high-altitude desert regions, which are optimal for solar farms.
In central India, Jharkhand has a solar capacity of 18,180 MWp, while Karnataka, another solar leader, provides 24,700 MWp, helping it remain a forerunner in renewable energy. Kerala presents a potential of 6,110 MWp, focused on small-scale installations.
Madhya Pradesh boasts a substantial solar potential of 61,660 MWp, reinforcing its position as a hub for solar energy, while Maharashtra, with 64,320 MWp, continues to attract major investments in solar power generation. In the northeast, Manipur offers 10,630 MWp, and Meghalaya has 5,860 MWp of solar capacity.
Mizoram and Nagaland, with potentials of 9,090 MWp and 7,290 MWp, respectively, have great potential for off-grid solar applications. Odisha, a state rich in sunlight, holds a solar capacity of 25,780 MWp, which could serve as a major source of energy in the future.
Punjab has a smaller capacity of 2,810 MWp, but its focus on rooftop solar is growing. Rajasthan stands out with a massive solar potential of 142,310 MWp, making it the top state in terms of solar energy capacity. The state’s large desert areas are highly suitable for large-scale solar projects.
In the eastern part of India, Sikkim has a solar potential of 4,940 MWp, while Tamil Nadu, known for its renewable energy leadership, offers 17,670 MWp. Telangana also has a strong presence with a solar capacity of 20,410 MWp.
Tripura has 2,080 MWp of potential, while Uttar Pradesh offers 22,830 MWp, aiding in its push towards renewable energy. Uttarakhand, with 16,800 MWp, could tap into solar power to reduce dependency on hydropower. West Bengal has a potential of 6,260 MWp, indicating an opportunity for solar growth. Delhi has a solar capacity of 2,050 MWp, and other union territories contribute 790 MWp collectively.
Future outlook
India's solar energy sector is set for significant growth, driven by the country’s ambitious goal of achieving 500 GW of non-fossil fuel capacity by 2030. With an estimated solar potential of 748 GW, the government's commitment to renewable energy is evident through its policies, which includes initiatives such as the National Solar Mission and the PLI scheme. These efforts not only aim to establish India as a global leader in solar energy but also foster ecologically sustainable growth and strengthen energy security. The allocation in the Union Budget for solar power further highlights the government’s dedication to expanding solar infrastructure across the country.
The geographical diversity of India’s solar landscape, with states like Gujarat, Rajasthan, Karnataka, Maharashtra and Tamil Nadu emerging as major hubs for solar power generation, highlights the potential for large-scale solar projects. Continued investment in innovative technologies, along with the development of strategic partnerships at the state level, will be important for optimising solar energy deployment. Collectively, these initiatives position India’s solar sector as a cornerstone of its transition to a cleaner, more sustainable energy future.