India’s solar energy sector is on the brink of significant expansion, with the country aiming to achieve a 500 GW renewable energy capacity by 2030. A report by Kotak Institutional Equities forecasts that India’s solar capacity will grow from 82 GW in 2024 to 214 GW by 2030. This growth will be driven by a combination of factors, including the PM Surya Muft Bijli Yojana (focused on rooftop solar), the PM-KUSUM scheme (solar-powered pumps), additions from captive industries, and large-scale utility projects.
The report states, “We anticipate India’s solar capacity will reach 214 GW by FY2030 from 82 GW in FY2024, fueled by utility-level additions, rooftop solar, solar pumps, and captive industrial growth.”
India’s total energy capacity is expected to increase from 442 GW in FY2024 to 641 GW by FY2030. Of this, around 66% of the additional capacity will be sourced from solar power. As of FY2024, India has 70 GW of installed solar module capacity and 7 GW of solar cell manufacturing capacity. In the next three years, India is expected to add 84 GW in solar cell capacity, although delays in execution may result in lower-than-expected additions.
With a clear government focus on increasing renewable energy capacity, India’s overall installed energy capacity is set to double over the next 11 years, with renewables accounting for 90% of the incremental increase. Moreover, any progress under the National Green Hydrogen Mission could further enhance demand projections.
Policies such as trade barriers, the introduction of production-linked incentive (PLI) schemes, and tariffs on Chinese solar imports (including the 50% tariff imposed by the US and the Uyghur Forced Labor Prevention Act of June 2022) have supported the growth of India’s solar manufacturing sector. These measures have contributed significantly to the growth of domestic production, and their continued implementation will be crucial for sustaining the industry’s expansion.
The report also highlights that, when evaluating the economic viability and profitability of India’s current seven manufacturing pathways, most offer attractive margins and returns. This has led to optimistic projections for continued growth in the sector. However, as many companies plan to expand their capacity in the medium term, profit margins and return ratios are expected to stabilize.
Over the medium term, integrated Indian solar manufacturers (those managing the entire value chain from ingot to module production) and companies with local US manufacturing operations are likely to enjoy superior profitability and higher production efficiency.
That said, the report also warns of the risks of overcapacity. “We anticipate increased competition will start affecting margins from 2028,” the report concludes.
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