India’s solar capacity is accelerating rapidly, reshaping its energy transition and domestic renewable manufacturing ambitions.
India is set to commission more solar capacity in 2026 than in any previous year, according to Wood Mackenzie, extending a twelve year expansion under the Narendra Modi government that has transformed solar from a marginal source of electricity into one of the main pillars of India’s energy transition. The expected record in 2026 is the latest point in an expansion that has accelerated dramatically since the Modi government came to office. India had 2.82 gigawatts (GW) of installed solar capacity at the end of March 2014. By 30 June 2026, that had risen to 162.15 GW, a roughly 57.5- fold increase. More than 159 GW of the country’s current solar capacity has therefore been added since 2014. The pace at which the capacity has been built has itself accelerated. India crossed the 50 GW mark during 2021-22, when cumulative solar capacity reached about 54 GW. It reached 105.65 GW by 31 March 2025, meaning that the next 50 GW took roughly three years.
By 31 March 2026, capacity had reached 150.26 GW, and by 30 June it had risen to 162.15 GW. The country therefore took roughly eight years to build its first 50 GW, about three years to add the next 50 GW and around 15 months to add another 50 GW. India added 34 GW of solar capacity in the first half of 2026, 38% above the level recorded in the first half of 2025, as developers accelerated commissioning ahead of the June deadline for the Approved List of Models and Manufacturers-II (ALMM-II). Wood Mackenzie, a global research, data analytics and consulting firm, expects full-year additions to exceed 50 GW, surpassing the previous annual record of 49 GW set in 2025. If Wood Mackenzie’s forecast is realised, India will add more than 50 GW in 2026 alone. That would mean installing in one year an amount of solar capacity broadly equivalent to the entire capacity accumulated during the first eight years of the country’s current solar expansion.
The annual additions show the same acceleration. India added 1.17 GW in 2014-15, 3.13 GW in 2015- 16, 5.66 GW in 2016-17, 9.56 GW in 2017-18, 6.75 GW in 2018-19 and 6.51 GW in 2019-20. Additions subsequently rose to 12.76 GW in 2021-22, 12.78 GW in 2022- 23, 15.03 GW in 2023-24 and a record 23.83 GW in 2024-25. Ministry of New and Renewable Energy (MNRE) data shows that another 11.89 GW was added between 1 April and 30 June 2026. The expansion has also changed India’s position in the global solar market. The International Renewable Energy Agency (IRENA), in its Renewable Capacity Statistics 2026, places India among the world’s three largest countries by installed solar capacity. In calendar year 2025, India added about 37 GW of solar capacity, placing it among the world’s largest markets for annual solar additions. The growth has occurred overwhelmingly during the Modi government’s tenure, but it has not been driven by a single programme. The policy framework has evolved from creating demand for solar power to building an indigenous manufacturing base. It has included large solar parks, obligations on power distributors to purchase renewable energy, incentives for transmission from renewable-energy projects, rooftop solar programmes, the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PMKUSUM) for agricultural solarisation, the Production Linked Incentive (PLI) scheme for high-efficiency solar modules and the Approved List of Models and Manufacturers framework.
The manufacturing expansion has been substantial, as government data shows. Solar module manufacturing capacity increased from 2.3 GW in 2014 to about 172 GW by 31 March 2026. The Approved List of Models and Manufacturers framework for modules has expanded substantially, while the separate list for solar cells, introduced more recently, had reached about 27 GW by March 2026. The expansion is also becoming more distributed. As of 30 June 2026, India had 121.25 GW of groundmounted solar capacity, 30.11 GW of grid-connected rooftop solar, 4.36 GW of solar capacity forming part of hybrid renewable-energy projects and 6.43 GW of offgrid solar. PM-KUSUM has taken solar into agriculture, while the rooftop programme has sought to increase household generation. Government data shows that 25 lakh agricultural pumps had been installed with solar systems or converted to solar power under PM-KUSUM by the end of financial year 2025-26, with 13.93 lakh of those completed during that financial year alone. The transformation is increasingly visible in electricity generation, not merely in installed capacity. The International Energy Agency (IEA) reported that India’s combined solar and wind generation increased 20% year-on-year in the first half of 2025, taking their combined share of electricity generation to almost 14%, compared with 11% in the first half of 2024. Solar generation alone rose 25%. The change is also beginning to affect coal generation.
The IEA says coalfired electricity generation in India declined by about 3% in 2025, one of only three annual declines in five decades. It attributed the decline partly to an early and strong monsoon, which boosted hydropower and reduced electricity demand, but also noted the continuing growth of wind and solar power. Coal nevertheless remained dominant, accounting for about 71% of India’s electricity generation in 2025, down from 74% in 2024 and 76% in 2015. India’s solar expansion has not eliminated the country’s dependence on coal. Solar capacity can rise much faster than solar’s contribution to total electricity generation because photovoltaic generation is concentrated during daylight hours. The increasingly large solar fleet therefore creates a parallel requirement for transmission, energy storage and other forms of grid flexibility as solar output falls. The economic benefits of the broader renewable expansion are already measurable. According to IRENA estimates, India’s renewable-energy fleet avoided $14.9 billion in fossil-fuel costs in 2024, while avoiding an estimated 410.9 million tonnes of carbon dioxide (CO2) emissions and generating $31.7 billion in air-pollution-related health benefits.
These are figures for renewable energy as a whole, rather than solar alone. Solar itself has also become increasingly cost competitive. IRENA estimates India’s average cost of electricity produced by utility-scale solar projects at about $0.038 per kilowatt-hour (kWh) in 2024, a 91% decline from 2010 levels. India also recorded the world’s lowest weighted average total installed cost for solar projects in 2024 among the markets assessed by IRENA, at about $525 per kilowatt (kW). The next phase, however, is becoming more difficult. India’s success in expanding module manufacturing has not been matched by an equivalent expansion in domestic solar-cell production, which is the problem ALMM-II is now attempting to address. The new mandate requires affected solar projects to use panels made with cells manufactured in India. This has exposed a gap in the domestic supply chain. India now has a large capacity to manufacture solar modules, the finished panels installed in solar projects, but does not yet have enough capacity to manufacture the cells that go inside those modules. Wood Mackenzie expects the cost of large solar projects to rise by about 20% by the fourth quarter of 2026 as the shortage feeds through the supply chain.
The supply gap is also reflected in India’s imports. Wood Mackenzie says India imported 5 GW of wafers and 20 GW of solar cells during the first five months of 2026, with wafer imports rising 86% year-on-year. Indonesian cell imports nearly tripled during the period as Indian buyers shifted towards suppliers in Southeast Asia. This marks a shift in India’s solar strategy. The objective is no longer just to reduce imports of finished solar panels. The government is seeking to build a domestic supply chain in which India makes the key components itself, starting with modules and cells and eventually extending to wafers and ingots. The government has already extended the Approved List of Models and Manufacturers framework upstream. The third list, scheduled to take effect from 1 June 2028, will extend the domestic-content requirements further to the silicon wafers and ingots used to manufacture solar cells. Officials in the Ministry of New and Renewable Energy have described the move as an effort to deepen domestic value addition and reduce reliance on imports.
Wood Mackenzie says 14 GW of new cell manufacturing capacity is currently under construction and expects another 130 GW of cell capacity to come online by 2029. But the transition will not immediately eliminate the supply gap. The agency projects that India will produce only 29 GW of solar cells in 2027, against average annual demand for modules equivalent to 50 GW, leaving a substantial supply gap. It expects system prices to fall by only 3% between the fourth quarter of 2026 and the fourth quarter of 2027. “Prices are expected to stabilise through 2029 as additional cell capacity comes online, but the transition will require policy consistency and timely execution by manufacturers,” said Mathew Thomas, Research Analyst, Wood Mackenzie. The trajectory since 2014 shows how far the sector has moved. When the Modi government took office, India had 2.82 GW of installed solar capacity. Twelve years later, the country has more than 162 GW. It has become the world’s third-largest solar market by installed capacity and is among the world’s leading countries for annual solar additions. The significance of the expected 2026 record therefore extends beyond another annual capacity milestone. India has moved from building a solar market to building a solar industry.
