Solar Energy is one of the fastest-growing industries in India. As of 31st August 2019, solar installed capacity reached approximately 25 GW, making it the 3rd largest solar power market in the world after China and the USA. India also has the lowest capital cost per MW globally for the installation of solar power plants. In 2018, solar energy accounted for nearly 53% of new energy capacity additions in the country. This growth is mainly due to various government incentives and policies provided for the promotion of solar energy in the country.

The government of India launched the National Solar Mission in 2010, which planned to generate 20 GW by 2022. This target was achieved four years ahead of schedule, and in 2015, the target was raised to 100 GW of solar capacity (including 40 GW of rooftop solar) by 2022, targeting a US$ 100 billion investment. The Indian solar market increased its solar-generation capacity eight times from 2,650 MW in 2014 to over 20 GW in January 2018. It added 3 GW of solar capacity in 2015-16, 5 GW in 2016-17, and over 10 GW in 2017-18. This dropped the average price of solar electricity to 18% less than its coal-fired counterpart. As more efficient batteries are developed to store electricity, the cost of solar will be decreased further by 66% as compared to current costs—according to Bloomberg New Energy Outlook 2017.

In a year, India has about 250-300 clear and sunny days with a calculated solar energy incidence of about 5000 trillion kWh per year and annual radiation varying from 1600-2200 kWh/m2 on India’s land. This solar energy availability exceeds the possible energy output of all fossil fuel energy reserves in a year and it is expected that by 2040, around 49% of the total electricity will be generated by renewable energy. This makes India one of the most attractive markets for renewables in the world.

In addition to India’s large-scale grid-connected solar PV initiative, it is also developing off-grid solar power for local energy needs; especially for rural energy needs. By 2015, just under 1 million solar lanterns were sold in the country, reducing the dependency on kerosene in villages. There were also 118,700 solar home lighting systems installed and 46,665 solar street lighting installations provided under the national program. This led to nearly 3.4% of the total utility generation being from solar electricity in January 2019.

The Ministry of New and Renewable Energy (MNRE) has decided to provide custom and excise duty benefits to the solar rooftop sector, which will, in turn, lower the cost of setting up as well as generating rooftop solar power. At the moment, rooftop solar accounts for 2.1 GW of solar power, of which 70% is industrial or commercial and 20% is residential. The remaining 10% is divided between agricultural buildings, cultural centres, and community centres. With India’s per capita energy consumption currently standing close to one-third that of the world average, a transition from coal to renewables will save India Rs. 54,000 crores (US$ 8.43 billion) estimates Greenpeace India.


To reach the 100GW of installed solar capacity by 2022, the government has set a target to auction at least 77 GW of additional solar power capacity by March 2020. The government also established 47 solar parks to make land available to the promoters of solar plants. Several of these parks are among the world’s largest such as the Kurnool Ultra Mega Solar Park with a capacity of 1,000 MW, the Kamuthi Solar Power Project with a capacity of 648 MW, and Gujarat solar parks with a combined capacity of 605 MW

In July 2017, the Indian Railways introduced trains with rooftop solar that will power all the lights, fans, and displays inside the coaches. The Cochin International Airport, which is the seventh busiest airport in India, is the first one in the world to run completely on solar power. As part of the government’s SAUBHAGYA scheme launched in 2015, the use of local microgrids run on solar power played a huge role in the aim to electrify every Indian household by 2019. The government also provides a subsidy of up to 90% of the upfront capital cost to install solar-powered water pumping systems for irrigation in farms and drinking water in villages. As of 2017, more than 142,000 solar pumps have been installed to irrigate fields. 

You can read more about solar irrigation pumps here.

Other government schemes include the solar street light scheme that provides solar DC lighting systems to over 500 cities in India, leading to the 135 crore kWh of energy savings. 

You can read more about solar LED street lighting here.

Coming to states, Karnataka and Telangana have the highest solar generation capacity in India, with the former exceeding 5,000 MW and the latter exceeding 3,400 MW of installed capacity by the end of 2018. As of July 2019, the largest segment of solar PV installed is ground-mounted solar with a capacity of 27,930 MW. The next segment is rooftop solar with an installed capacity of 2,141 MW. The smallest segment is off-grid solar at 919 MW capacity, which is mainly used in rural areas that do not have access to the national grid.

In 2018, prices of solar dropped by almost 73% (Rs 2.44/kWh) as compared to those in 2010 (Rs 18/kWh). Competitive reverse auctions, falling panel and component prices, the introduction of 47 solar parks by the government to make land available for new projects, and lower borrowing costs have all contributed to the falling prices. This has made solar the cheapest form of renewable energy that is cheaper than power generated from fossil fuels. The tariff for rooftop solar installations is also falling since you can now get 100% locally made components for your rooftop system.

Solar energy forms the backbone of the global energy transformation to renewable energy. As costs for solar continue to fall, it will soon become the lowest-cost source of new power generation and the least-cost fossil fuel alternative. This will make the decarbonisation of the electricity sector economically attractive which, in turn, will also reduce the cost of electric vehicles for transport and heat pumps for heating and irrigation. All in all, the growth of solar in the Indian market is a success story fueled by promising state and national government policies and incentives. The adoption of a National Solar Policy will help weed out issues in the solar market and further boost the growth of the industry. Solar energy storage and Concentrated Solar Power (CSP) will play a huge role in the future of solar in the country, and with the government’s support, India will be able to set the benchmark for solar energy generation. 

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