According to VynZ Research estimates, the India solar energy market was valued at USD 12.55 billion in 2025 and is projected to reach USD 69.68 billion by 2035, expanding at a CAGR of 18.7% between 2026 and 2035.
This trajectory reflects structural growth rather than
cyclical momentum. Capacity additions are being driven by national renewable
targets, competitive bidding frameworks, and large-scale infrastructure
investments aimed at long-term energy security.
India’s policy direction, led by the Ministry of New and
Renewable Energy (MNRE), continues to prioritize grid-connected solar capacity,
domestic manufacturing, and integrated renewable planning under flagship
initiatives such as the National Solar Mission and PM Surya Ghar Muft Bijli
Yojana.
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Why the Market Is Gaining Strategic Momentum
India’s solar expansion sits at the intersection of three
powerful forces: rising electricity demand, decarbonization commitments, and
economic competitiveness.
Electricity consumption continues to increase across
industrial corridors, urban centers, and digital infrastructure. At the same
time, India’s Nationally Determined Contributions (NDCs) are reshaping the
generation mix toward renewables.
Solar power has emerged as the most cost-competitive source
of incremental capacity. Declining module prices, improved efficiencies, and
scale-driven procurement models — particularly auctions conducted by the Solar
Energy Corporation of India (SECI) — have reinforced investor confidence and
price transparency.
Simultaneously, transmission upgrades led by the Power Grid
Corporation of India Limited (POWERGRID) and guided by the Central Electricity
Authority are strengthening evacuation infrastructure, enabling large-scale
renewable integration.
Key Growth Drivers & Opportunity Areas
The adoption trajectory is being shaped by multiple
high-impact drivers:
Utility-Scale Solar Dominance
Utility-scale projects accounted for approximately 71% of total market revenue
in 2025. Solar parks in Rajasthan and Gujarat continue to attract capital due
to strong irradiation levels, transmission readiness, and long-term power
purchase agreements.
Rooftop & Distributed Solar Expansion
Rooftop installations represented nearly 29% of market revenue and are among
the fastest-growing segments. Commercial and industrial consumers are adopting
captive and open-access solar to optimize energy costs and meet sustainability
mandates.
Domestic Manufacturing & PLI Incentives
Production Linked Incentive (PLI) schemes are reshaping the upstream value
chain. While import dependence remains a near-term challenge, localized
manufacturing is expected to improve supply resilience and cost visibility over
the medium term.
Solar-Plus-Storage & Grid Modernization
As penetration levels increase, grid stability becomes central to long-term
viability. Hybrid projects combining solar and storage are gaining traction,
supported by digital monitoring systems and advanced inverters that enhance
load balancing and peak management.
Segment Performance Snapshot
Solar photovoltaic (PV) technology dominates the market,
accounting for approximately 94% of total revenue in 2025 due to modular
scalability and lower levelized costs. Concentrated solar power (CSP) remains
limited to niche and hybrid applications.
On-grid systems contribute nearly 86% of total revenue,
reflecting strong policy alignment and established transmission networks.
Off-grid systems, supported by rural electrification and agricultural
solarization programs, represent a steady but smaller share.
By end user, utilities account for 64% of total revenue,
followed by commercial and industrial users at 25%, and residential
installations at 11%.
Regional Dynamics: Western India Leads
Western India contributes roughly 32% of total market
revenue, supported by large land availability and early adoption of solar
parks. Southern India follows with strong commercial and industrial demand,
while Northern India continues to expand through rooftop and distributed
adoption models.
Emerging adoption in Eastern and North-Eastern regions
presents long-term opportunities as grid connectivity and policy execution
improve.
Competitive & Innovation Landscape
The competitive environment is moderately to highly
concentrated, with established developers, integrated power companies, and EPC
specialists competing on scale, cost efficiency, and execution capability.
Companies such as Adani Green Energy Ltd., Tata Power Solar
Systems Ltd., ReNew Power Pvt. Ltd., NTPC Renewable Energy Ltd., and Waaree
Energies Ltd. are strengthening their positions through scale expansion,
technology integration, and strategic partnerships.
Recent developments in transmission modernization, digital
substations, and localized manufacturing indicate that the ecosystem is moving
beyond capacity addition toward system-wide optimization.
Innovation is increasingly centered around hybrid renewable
systems, digital asset management platforms, and performance analytics — areas
that enhance bankability and long-term asset returns.
Investor & Enterprise Implications
For investors, the India solar energy market offers a rare
combination of high growth (18.7% CAGR) and policy-backed stability. Long-term
PPAs, competitive auction frameworks, and government-supported transmission
infrastructure reduce market entry risks relative to emerging renewable
markets.
For enterprises, solar adoption is becoming a strategic
lever for cost management and ESG compliance. Captive and open-access models
provide predictable power pricing while aligning with decarbonization
commitments.
Over the next decade, value creation will increasingly shift
toward integration — combining generation, storage, grid intelligence, and
domestic manufacturing into a resilient renewable ecosystem.
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