India’s solar energy sector is on the verge of a significant expansion, aiming to achieve 500 GW of renewable energy capacity by 2030. A Kotak Institutional Share report predicts that India’s solar power 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 power pumps), collections from captured industries and large-scale utility projects.
“We expect India’s solar power capacity to reach 214 GW by FY 2030, up from 82 GW in FY 2024, fueled by utility-level additions, rooftop solar, solar pumps and captive industrial growth. received.”
India’s total power capacity is expected to increase from 442 GW in FY2024 to 641 GW by FY2030. Of this, about 66% of the additional capacity will come from solar energy. By FY 2024, India will have 70 GW of installed solar module capacity and 7 GW of solar cell manufacturing capacity. Over the next three years, India is expected to add 84 gigawatts of solar cell capacity, but delays in implementation may result in lower-than-expected additions.
With the government’s clear focus on increasing renewable energy capacity, India’s total installed energy capacity is set to double over the next 11 years, with renewable energy accounting for 90% of the incremental increase. Further, any progress under the National Green Hydrogen Mission could further improve demand projections.
Policies such as trade barriers, introduction of Product 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 critical to sustaining the expansion of the industry.
In assessing the economic viability and profitability of India’s current seven product lines, the report highlights that most offer attractive margins and returns. This has led to optimistic projections for the continued growth of the sector. However, profit margins and return rates are expected to stabilize as many companies plan to expand their capacity in the medium term.
In the medium term, integrated Indian solar manufacturers (managing the entire value chain from ingot to module production) and companies with domestic US manufacturing operations are likely to enjoy higher profitability and higher production efficiency.
The report also warns of the risks of overcapacity. “We expect increased competition to impact margins from 2028,” the report says.
