India’s solar sector crossed 164 GW of installed capacity in 2026, adding a record 27 GW in just six months. Here is what’s driving the surge — and what comes next on the road to 500 GW by 2030.
India’s solar sector is having its strongest year yet. Between rapid capacity additions, a manufacturing boom, and policy shifts aimed at reducing dependence on Chinese imports, 2026 is shaping up to be a defining chapter in the country’s clean energy journey. Here’s a look at where things stand.
Installed Capacity: Crossing New Milestones
As of July 2026, India’s installed solar capacity crossed 164.5 GW, up from roughly 2.82 GW back in 2013–14 — a more than 57-fold increase in just over a decade. Of this, ground-mounted utility-scale solar accounts for the bulk of the total (around 122 GW), while grid-connected rooftop solar has grown to nearly 31 GW.
The first half of 2026 alone saw a record 27 GW of new solar capacity added — up 49% year-on-year — making it the strongest six-month stretch in the sector’s history. Solar now makes up about 30% of India’s total installed power capacity and over 55% of its renewable energy capacity, comfortably ahead of wind, hydro, and bioenergy.
Rajasthan continues to lead the country in installed utility-scale solar capacity, followed by Gujarat and Karnataka. Together, the top 10 states account for nearly all large-scale solar installations happening this year.
Why Installations Surged — Then Slowed
A big part of the H1 2026 rush was developers racing to commission projects ahead of two regulatory deadlines:
- ALMM List-II enforcement, effective June 2026, requiring solar cells (not just modules) used in government-linked projects to come from an approved list of domestic manufacturers.
- A phased reduction in interstate transmission (ISTS) charge waivers, which fell from 75% to 50% for projects commissioned after July 2026, with the waiver disappearing entirely by 2028.
Once these deadlines passed, growth cooled noticeably — utility-scale additions in Q2 2026 dropped sharply compared to Q1, as the industry adjusted to the new domestic-content rules. Analysts still expect full-year 2026 installations to be the highest ever recorded for India, even as the pace slows in the second half due to cell shortages and rising module prices.
“India added record solar capacity in the first half of 2026, supported by strong demand and projects moving ahead of key policy changes. The concern now is whether this pace can continue.”
Manufacturing: The Bigger Story This Year
Perhaps the most significant shift in 2026 isn’t installation numbers — it’s the push toward building solar equipment domestically instead of importing it.
- Solar cell manufacturing capacity reached around 42 GW by mid-2026, with major expansions from Waaree Energies, Vikram Solar, Premier Energies, Rayzon Solar and Adani, alongside newer entrants such as GB Solar and Aroma Solar.
- Module manufacturing capacity has grown even faster, now well above 80 GW.
- The government has floated a scheme to support 10 GW of domestic polysilicon production, though this remains the weakest link — India still has no commercial polysilicon manufacturing due to high capital costs and the technology gap with China.
- MNRE has signaled plans for an ALMM List-III, extending domestic-content rules to solar wafers from 2028.
Rooftop Solar and PM Surya Ghar
Rooftop solar continues to be one of the fastest-growing segments, largely thanks to the PM Surya Ghar: Muft Bijli Yojana scheme. As of July 2026, the program had enabled installation of nearly 40 lakh rooftop solar systems, benefiting more than 48 lakh households. The government has also been pushing concessional, collateral-free financing and higher central financial assistance to make rooftop adoption easier for residential consumers.
What’s Driving Policy Right Now
A few themes are shaping India’s solar policy conversation in 2026:
- Domestic manufacturing push — via ALMM lists for modules, cells, and eventually wafers.
- Reduction of transmission subsidies — the ISTS waiver phase-out is nudging developers toward long-term cost planning.
- Exemptions for smaller projects — net-metering and open-access solar projects have a temporary exemption from ALMM-II requirements until the end of 2026.
- A massive project pipeline — India’s large-scale solar pipeline stood at over 200 GW as of mid-2026, with an additional 150+ GW tendered and awaiting auction.
The Road to 500 GW
All of this activity sits under India’s broader target: 500 GW of non-fossil-fuel electricity capacity by 2030. With total renewable capacity (excluding large hydro) already above 236 GW as of mid-2026, solar remains the single biggest contributor to that goal — and the one facing the most transformation, as the country shifts from being a major importer of solar equipment to becoming a serious manufacturing hub in its own right.
The next few years will test whether India can keep pace on both fronts at once: installing panels fast enough to hit its 2030 targets, while building the domestic supply chain needed to do so without leaning on imports.