India’s solar boom reshapes the energy landscape

India’s solar industry is booming, with over 117 GW installed capacity and $17.3 billion in funding in 2025, positioning the country as the third-largest solar power producer globally.

Here’s a refined overview of India’s solar sector in 2025:

  • Installed solar capacity: 117 GW as of September 2025, making India the third-largest solar power producer after China and the U.S.
  • Utility-scale solar: 85.6 GW commissioned, with 68.2 GW in the pipeline
  • Rooftop solar: 5.15 GW added in FY2025, with 7.2 GW expected next year
  • Corporate funding: $17.3 billion raised from January to September 2025, including venture capital, public markets, and debt
  • Q3 rebound: $6.5 billion across 49 deals, a 38% YoY increase
  • Active players: Project developers and independent power producers led acquisitions, securing 5.4 GW of projects
  • Solar module manufacturing: Capacity surged from 2 GW in 2014 to 100 GW in 2025, though effective production is around 85 GW
  • Top module suppliers: Waaree, Jinko, and Longi dominated the market in FY2025
  • Innovation goals: India aims to become a global solar hub by 2050, focusing on manufacturing, R&D, and knowledge exchange

Comparison between Photovoltaic (PV) cells and

Concentrating Solar-Thermal Power (CSP) systems

Photovoltaic (PV) cells directly convert sunlight into electricity using semiconductor materials, while Concentrating Solar-Thermal Power (CSP) systems use mirrors to concentrate sunlight to create heat, which then drives a turbine to generate electricity. 

Operating Principle

  • PV cells convert sunlight directly into electricity through the photovoltaic effect, generating direct current (DC) that is then inverted to alternating current (AC) for use.
  • CSP systems use mirrors or lenses to concentrate sunlight onto a receiver that heats a fluid to produce steam which drives a turbine to generate electricity, producing AC indirectly via thermal energy conversion.

Energy Conversion and Efficiency

  • PV panels'' efficiency ranges around 17-20% commercially, with potential for higher efficiencies in advanced designs. They convert light directly and work in diverse weather conditions without needing direct sunlight.
  • CSP systems generally require direct sunlight and operate best in sunny, arid regions. They convert solar energy to heat then electricity, with efficiency dependent on temperature and concentration ratio of sunlight.

Energy Storage and Dispatchability

  • CSP plants often integrate thermal energy storage, allowing electricity generation during non-sunny periods or at night, improving grid dispatchability.
  • PV systems lack inherent thermal storage, relying on battery systems for electricity storage, which can be costly and less efficient at scale.

Scale and Installation

  • PV systems are highly scalable and modular, functioning well from small rooftop installations to large solar farms.
  • CSP plants require large-scale installations with significant infrastructure (mirrors, towers, turbines), and are economically viable mainly at large capacity levels (e.g., 100 MW or more).

Site Requirements

  • PV can operate efficiently under various conditions, including diffuse solar radiation and cloudy weather.
  • CSP requires high direct normal irradiance (DNI), limiting siting to sunny regions like deserts.

Cost and Economic Considerations

  • PV technology costs have decreased rapidly, making it cost-effective for many applications. Cost depends on panel technology, scale, and installation.
  • CSP historically has higher upfront capital costs due to complex infrastructure but benefits from thermal storage capabilities which can enhance value.

Environmental and Practical Considerations

  • PV systems have relatively low environmental impact during operation with no water consumption.
  • CSP plants may require significant water for cooling and carry risks like bird mortality due to intense solar flux near receivers.

Aspect

Photovoltaic (PV)

Concentrating Solar Thermal Power (CSP)

Conversion Method

Direct light to electricity (DC, then AC)

Solar energy → heat → steam → electricity (AC)

Efficiency

~17-20% commercially

Higher potential efficiency with heat storage

Storage

Limited, battery-based

Thermal energy storage enables dispatchability

Scale

Highly scalable, small to large

Large-scale only (>100 MW)

Site Requirement

Works in diffuse and direct sunlight

Requires high direct normal irradiance (sunny)

Cost

Lower upfront cost, rapidly declining

Higher upfront capital cost, benefits from storage

Environmental Impact

Low, minimal water use

Water use for cooling, some wildlife impact

Weather Sensitivity

Less sensitive to clouds

Sensitive to cloud cover

Significance of Solar energy in India

    • Achieving India''s climate targets: In accordance with the Paris climate agreement, India''s Nationally Determined Contributions (NDCs) include cutting emissions intensity by 45% and achieving 50% non-fossil fuel capacity by 2030.
      • Further, India aims to achieve 500 GW of non-fossil fuel-based energy capacity by 2030 (Panchamrit announced at UNFCCC COP26).
    • Fulfill future Energy Needs: India''s energy use is 3 times the global average (India Energy Outlook 2021) and is expected to drive 25% of global demand growth over next 20 years.
    • Rural Electrification: Solar energy can support off-grid power generation with fast capacity expansion, benefiting remote areas.

Factors behind growth of Solar Energy in India

  • Geographical Advantage: India receives abundant solar radiation, with ~300 sunny days per year and an average of 4-7 kWh/m²/day, making most regions ideal for solar power generation.
  • Government Schemes: 
    • Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) Scheme targeting 30.8 GW solar power in agricultural sector.
    • PM Surya Ghar: Muft Bijli Yojana enabling nearly 10.09 lakh rooftop solar installations (March 2025), establishment of National Institute of Solar Energy etc.
  • Financial support and encouraging investment: India has allowed 100% of foreign direct investment (FDI) through the automated process.
    • Further, Interstate transmission system (ISTS) fees are waived for solar and wind energy sales across states for projects that are scheduled to be put into service by June 30, 2025. 
  • Boost RE consumption: Renewable Purchase Obligation (RPO) trajectory has been announced till 2029-30 including separate RPO for Decentralized Renewable Energy.
  • Indigenous manufacturing of solar components: Through initiatives like Solar Park Scheme, Production Linked Incentive (PLI) Scheme under National Programme on High Efficiency Solar PV Modules, etc.
  • Consumer awareness: Bureau of Energy Efficiency (BEE) launched Standards and Labeling (S&L) programs for both grid-connected solar inverters and solar photovoltaic (PV) modules in March 2024, aiming to help consumers make informed choices and improve energy efficiency. 
  • Building infrastructure: Under the Green Energy Corridor Scheme, the government is laying new transmission lines and creating new sub-station capacity for evacuation of renewable power. 
  • International Cooperation and Leadership: Initiatives like International Solar alliance, put India at the forefront of investing in clean energy technologies, by increasing energy access, guaranteeing energy security, and accelerating the energy transition among its member nations. 
    • Further, Indo-German Solar Energy Partnership (IGSP) is developing market forces while introducing enabling mechanisms and facilitating investments in rooftop PV systems.

Issues constricting in further advancement of solar energy in India

  • Land Acquisition: Solar can need 300 times as much space as nuclear energy (Economic Survey 2023-24).
    • Extremely large-scale solar farms require huge areas of land often conflicting with food security and environmental interests.
  • Infrastructure constraints: Grid integration and energy storagepose challenges to scalability due to technological limitations, high costs etc.
  • Environmental concerns: Extraction of minerals needed for Solar, particularly Lithium, Cobalt, Nickel, and some rare earth minerals, leave large scars in the landscape and require substantial water, releasing about 15 tonnes of CO2 per tonne of mineral. (Economic Survey 2023-24)
  • Challenges to domestic manufacturing: Lack of R&D, modern development facilities, and manufacturing infrastructure impact the development of solar panels, equipment, and inverters in India leading to increased dependence on imports 
  • Policy and Regulatory Hurdles: Complex regulatory frameworks and inconsistent policies across states affect project implementation. 
    • Delays in approvals and land clearances reduce the pace of solar energy deployment.
  • Other issues: High initial Investment; waste problem as solar panels have to be replaced every couple of decades; etc.

Way forward

  • Modernize grid: Invest in smart grid technologies and develop localized microgrids in rural areas.
  • Increase land-use efficiencyPromote agrivoltaics and increase development of floating solar panels on reservoirs, irrigation canals, and water bodies to minimize land use conflicts.
  • Policy SimplificationHarmonizing state and central policies can help streamline project approvals and incentivize investments.
  • Technological Innovations: Advancements in solar panel efficiency, energy storage (batteries), and hybrid systems (solar-wind) can boost adoption
    • The integration of artificial intelligence (AI) and the Internet of Things (IoT) in solar systems can optimize energy production and consumption.
  • Circular economy approach: Establish a robust recycling ecosystem for solar panels and batteries to recover critical materials and reduce the need for new mineral extraction.
  • Boost Domestic Manufacturing: Encouraging local production of solar cells, modules, and storage solutions through programs like "Make in India" can help boost the solar production further.


POSTED ON 28-10-2025 BY ADMIN
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