India’s solar energy sector

India’s solar energy sector


India’s solar energy sector is undergoing significant developments, with the government implementing policies to promote domestic manufacturing of solar panels.

  • The recent Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirement for Compulsory Registration) Order, 2019, aims to boost indigenous production by certifying manufacturers and restricting imports, particularly from China, which dominates the global supply market.
  • However, the challenge lies in balancing the need for domestic growth with the imperative of maintaining quality and affordability in solar power, especially considering India’s ambitious renewable energy targets for 2030.


GS-02 (Government policies and interventions

Dimensions of the Article:

  • Topic Overview
  • India’s solar energy potential
  • Major initiatives implemented by the Indian government to promote solar energy
  • Importance
  • Suggested Measures

Topic Overview:

  • India plans to promote domestic manufacturing in the solar energy sector while ensuring quality and affordability.
  • The recent policy measures aimed at curbing reliance on imported solar panels emphasizes the importance of fostering a robust indigenous solar industry.

India’s solar energy potential:

  • India possesses abundant solar energy potential, with approximately 5,000 trillion kWh of energy incident over its land area each year, and most regions receiving 4-7 kWh per square meter per day.
  • Solar photovoltaic (PV) power offers significant scalability opportunities in India.
  • The National Institute of Solar Energy has estimated the country’s solar potential at about 748 GW, assuming that 3% of the wasteland area can be utilized for solar PV modules.
  • India has set ambitious targets for renewable energy capacity, aiming to achieve 175 GW by 2022 and 500 GW by 2030. This marks the world’s largest expansion plan in renewable energy.
  • In 2021, India ranked as the second-largest market in Asia and third globally for new solar PV capacity additions, with 13 GW installed. In total installations, India ranked fourth globally, surpassing Germany for the first time with 60.4 GW.
  • India has made significant strides in solar power deployment, achieving the fifth global position by surpassing Italy. Solar capacity has increased more than elevenfold in the last five years, from 2.6 GW in March 2014 to 30 GW in July 2019. Presently, solar tariffs in India are highly competitive and have achieved grid parity.
  • Furthermore, high-efficiency solar PV modules have been included in the Production-Linked Incentive (PLI) Scheme to enhance India’s manufacturing capabilities and boost exports.

Major initiatives implemented by the Indian government to promote solar energy:

  • Approval of 45 solar parks with a total capacity of 37 GW alongside operation of top solar parks like Pavagada (2 GW), Kurnool (1 GW), and Bhadla-II (648 MW).
  • Installation of the world’s largest renewable energy park, a 30 GW solar-wind hybrid project in Gujarat.
  • Launch of various schemes such as Solar Park Schemes, VGF Schemes, CPSU Schemes, Defence Schemes, Canal bank and canal top Schemes, Bundling Schemes, and Grid Connected Solar Rooftop Schemes.
  • Implementation of policies including a trajectory declaration for Renewable Purchase Obligation (RPO) and waiver of Inter-State Transmission System (ISTS) charges and losses for inter-state sale of solar and wind power.
  • Amendment of building bye-laws to mandate rooftop solar panel installation for new constructions or higher Floor Area Ratio.


  • The promotion of domestic solar manufacturing is crucial for India’s energy security and sustainability goals.
  • With plans to source a significant portion of its electricity from non-fossil fuel sources by 2030, India must ramp up its solar capacity. However, achieving this target necessitates a delicate balance between promoting domestic production and maintaining competitive prices.
  • The policy shift towards compulsory registration of solar module manufacturers aims to strike this balance by incentivizing indigenous manufacturing while curbing imports.

Suggested Measures:

  • Stringent Quality Control: As India seeks to expand its solar capacity, it must prioritize stringent quality control measures to ensure that domestically manufactured panels meet international standards. The National Institute of Solar Energy’s inspection of manufacturing facilities is a step in the right direction, but continuous monitoring and enforcement are essential to maintain quality standards.
  • Affordability: While promoting domestic manufacturing, the government must also focus on ensuring affordability of solar power for consumers. Excessive protectionism or reliance solely on domestic production may lead to increased costs, undermining the competitiveness of solar energy. Therefore, policymakers should explore avenues to reduce manufacturing costs through innovation, technology transfer, and economies of scale.
  • Promoting Innovation: Encouraging research and development in solar technology will be crucial for India to establish itself as a global leader in the solar industry. Investment in innovation can lead to the development of more efficient solar panels, driving down costs and increasing competitiveness. Additionally, promoting collaboration between academia, industry, and government can accelerate the pace of technological advancement in the sector.
  • Incentivizing Domestic Production: Incentives such as tax breaks, subsidies, and preferential treatment in government procurement can incentivize domestic manufacturers to scale up production and invest in quality enhancement. By creating a conducive policy environment, the government can foster a thriving ecosystem for solar manufacturing, attracting both domestic and foreign investment.