Mumbai, India, June 04: Against a backdrop of rising US-Iran tensions and surging oil prices that have once again exposed the world’s dependence on fossil fuels, India’s solar energy sector is entering a pivotal phase of expansion. Driven by strong policy support, rising consumer adoption, and rapid manufacturing scale-up, solar power is increasingly becoming central to India’s long-term energy security and sustainability strategy, particularly because it imports more than 85% of its crude oil requirements. Rubix Data Sciences has released its latest report titled “Solar Energy Update” as part of its Rubix Industry Insights series. An update to the Solar Energy report published in March 2025, it provides a comprehensive assessment of India’s solar landscape, covering capacity additions, manufacturing dynamics, trade flows, government initiatives, and the investment environment.
The report notes that FY2026 marks a watershed year for India’s solar growth. Cumulative installed solar capacity reached 150.26 GW as of 31 March 2026, crossing the 150 GW milestone. FY2026 also recorded the highest-ever annual solar addition of 44.61 GW, exceeding the government target of 34 GW and nearly doubling the previous record of 23.83 GW in FY2024–25. Over the decade from FY2016 to FY2026, annual capacity additions grew from 3.13 GW to 44.61 GW, a more than fourteen-fold increase. Distributed Renewable Energy from solar accounted for 16.3 GW or 36% of total additions, while the PPA route and C&I segment contributed 34% and 30% respectively.
India has steadily improved its global standing from 9th place in 2015 to 3rd place in cumulative installed solar capacity by 2025, and is poised to become the world’s second–largest solar market in 2026 in terms of annual installations.
The report highlights significant regional concentration, with seven states accounting for approximately 85% of cumulative installed solar capacity. Rajasthan and Gujarat have consistently held the top two positions, while Maharashtra has risen sharply from 8th to 3rd place and Karnataka from 10th to 5th over the same period.
On manufacturing, India added 119 GW of solar module capacity and over 9 GW of cell capacity in 2025, taking total module capacity to approximately 210 GW. This far exceeds domestic demand of 40-45 GW annually, with capacity utilisation falling to around 40%, down from over 70% in FY2023. The report notes that nearly 30 GW of existing capacity remains dependent on older MonoPERC technology, which is rapidly being displaced by next-generation TOPCon technology, heightening the risk of margin compression and consolidation among manufacturers unable to upgrade. Solar PV exports peaked at USD 1.97 billion in FY2024 before falling to USD 1.12 billion in FY2025, with 97% directed to the US, a dependency critically exposed when combined US tariffs exceeded 200% in April 2026. PV cell imports surged to USD 2.72 billion in the April 2025 to February 2026 period, up from USD 1.44 billion in the prior-year period , driven partly by front-loaded procurement ahead of the government’s mandatory domestic sourcing requirement for solar cells scheduled to take effect from June 2026. China’s share in India’s PV cell imports declined from 83% to 65% year-on-year, signalling gradual but meaningful supply chain diversification.
The report also points to strong investor confidence, with India’s solar sector attracting nearly USD 2.37 billion in FDI in 2025, accounting for over 4% of total FDI inflows and roughly 76% of all non-conventional energy FDI.
The report further details key government initiatives driving India’s solar transition. PM Surya Ghar: Muft Bijli Yojana, the world’s largest domestic rooftop solar programme, targets one crore household installations by March 2027 with approximately 22.7 lakh households covered as of January 2026 and nearly 10,000 installations carried out daily. The Union Budget 2026–27 allocated INR 220 billion to the scheme, a 181% increase from FY2024–25. The PLI scheme for solar PV modules, with a total outlay of INR 240 billion, has attracted approximately INR 529 billion in investments and 44,400 new jobs, while ALMM List-III for ingots and wafers, effective from June 2028, is set to deepen upstream domestic manufacturing integration.
“India has delivered a genuinely historic year in solar, 150 GW crossed, 44.61 GW added in a single year, and a credible path to becoming the world’s second–largest market. But the sector is now entering a more difficult chapter. Manufacturing capacity is running at roughly 40% utilisation, the US has effectively shut its door with tariffs above 200%, and nearly 30 GW of capacity is still based on the technology that the market is moving away from. The companies that survive the next three years will be those that integrate upstream, upgrade to TOPCon, and find markets beyond America. India’s solar ambition is real, but so is the consolidation ahead.” Tushar Bhaskar, President, Rubix Data Sciences.
Looking ahead, India’s solar capacity is expected to reach 280–300 GW by 2030, in support of the national target of 500 GW of non-fossil fuel capacity, an ambition that will require annual installations to sustain a 50 GW trajectory consistently. Whether that trajectory holds will depend on how effectively the sector navigates its current structural challenges: absorbing manufacturing overcapacity, diversifying beyond the US export market, accelerating upstream integration, and scaling rooftop solar from a subsidy-driven programme into a self-sustaining household utility.