The Hits & Misses of 2025

2025 proved to be a pivotal year for the Indian solar industry, driven by rapid capacity additions that shattered previous installation records. While India added 23.8 GW of solar capacity during the full year of FY2024–25, the country installed around 27 GW in just the first eight months of FY2025–26, underscoring the sharply accelerated pace of deployment this year. So much so that 40 GW is not looking as unlikely as it would have been just two years ago. 

For comparison, India had added only 12.35 GW of solar capacity during the first eight months of FY2024–25, reflecting an increase of nearly 120% year-on-year. This surge in installations also helped India cross the milestone of 50% non-fossil fuel installed power capacity in 2025, achieved five years ahead of its 2030 Paris Agreement target, with solar power emerging as the primary growth driver.

Not only installations, the share of renewable energy in India’s total power generation—which was earlier primarily driven by coal—has now seen an upward shift. The share of thermal power fell from 72.25% in 2021–22 to 69.10% in 2025–26. Meanwhile, renewables (including hydro) rose from 24.04% to 26.03%, signalling a slow but steady transition toward cleaner energy sources. Renewable energy generation in India has grown significantly over the last five years, rising by 46%, according to monthly data published by the Central Electricity Authority (CEA).

Rating agency ICRA estimates the share of generation from the renewable energy (RE) capacity, including large hydro, to cross 35% by FY2030 from 22.1% in FY2025, with expected incremental capacity addition of ~200 GW between FY2025 till FY2030.

A latest report from the International Energy Agency (IEA) said that owing to the prolonged monsoon, coal demand in the country declined slightly, leading to greater space for hydropower and renewables in India’s energy mix in 2025.

Manufacturing Boost

On the policy front, the country also witnessed the release of its maiden Approved List of Models and Manufacturers (ALMM-II) listing for solar cells, paving the way for a more robust domestic solar cell manufacturing ecosystem. The list currently reflects a total capacity of 23.7 GW, with eight players such as Emmvee Photovoltaics, Mundra (Adani) Solar, Premier Energies, Jupiter International, Waaree Energies, ReNew, and Tata Power. These are mostly legacy companies that were early adopters of solar cell manufacturing, other than ReNew Power of course.

However, it also saw the entry of new solar cell manufacturers such as Waaree Energies, which commenced solar cell manufacturing in 2025 itself. ReNew, which commissioned its solar cell manufacturing facility in late 2024, also saw greater maturity of its cell lines in 2025, widening India’s pool of companies offering solar cells to the domestic market. 

More than 40 solar module manufacturers have confirmed to Saur Energy about their plans to start solar cell manufacturing. These include companies such as Goldi Solar, Navitas, Cosmic PV Power, GAP Industries, Avaada, Grew Solar and several others. A large number of these firms have also planned to take the  IPO route to raise capital for their ambitious expansion plans.

2025 also marked a pivotal year for the solar module industry, which has a much larger number of players compared to the solar cell segment. At the beginning of 2025, India’s cumulative ALMM-listed solar module production capacity stood at 109.5 GW. This rose to 144.5 GW by December 2025, an increase in production capacity driven by both expansions and the entry of new players such as Avaada Group, Eastman, Macwin Solar, Znshine, Green Valley, Inox Solar, and others.

“2025 has been a defining year for India’s solar manufacturing ecosystem, marked by strong capacity expansion across modules and cells, reflecting India’s steady progress toward clean-energy self-reliance. This growth has been supported by a stable policy direction and continued backing from the Government of India, enabling manufacturers to scale with confidence,” Chetan Shah, Chairman & Managing Director, Solex Energy Limited, told Saur Energy. 

“Policy support from the government has been instrumental in enabling this progress. The consistency and clarity of recent reforms have strengthened industry confidence, allowing us to innovate boldly, collaborate meaningfully, and execute projects end-to-end with greater predictability. We hope to see this momentum continue in the months ahead,” said Devansh Jain, Executive Director of the INOXGFL Group. The group forayed into solar module manufacturing in 2025, with its planned commissioning in Ahmedabad.

On the other hand, 2025 also proved beneficial for domestic solar glass manufacturers, as the government imposed anti-dumping duties on imported solar glass, providing a level playing field for Indian companies such as Borosil Renewables, Vishakha, and others. With supportive policy measures and improved market prospects, new players also showed interest in entering the segment, with domestic capacity still short of meeting requirements.

Several large and mid-sized conglomerates such as Reliance, Avaada, Emerge, and others have decided to enter the solar glass market with sizeable capacities, while existing players like Borosil Renewables and Vishakha Industries have announced expansion plans. Estimates suggest Reliance is expected to set up around 12 GW of solar glass manufacturing capacity, Avaada is likely to begin with 7 GW, while Emerge plans to add 3 GW. Borosil Renewables expects India’s total solar glass production capacity to rise from the current 18 GW to 58 GW by FY27, while pegging domestic demand at about 50 GW.

“These players are definitely entering the market — there is no question about it. Others have also been discussing entry. We expect production to rise significantly; in fact, it will more than double in the country,” Pradeep Kheruka, Executive Chairman of Borosil Renewables, told investors recently.

BESS & New Verticals

2025 also saw several solar manufacturers foraying into new verticals. Companies such as Premier Energies, Saatvik Solar, and Sunora Solar entered the solar inverter business. Similarly, Premier Energies, Waaree Energies, and others expanded their portfolios to include transformer manufacturing.

However, the standout development was the rapid emergence of the BESS market. Several listed and unlisted companies announced plans to enter this segment. Companies such as Premier Energies, Waaree Energies, Tata Power, Vikram Solar, ReNew, Kosol Energie, and the Adani Group have announced plans to foray into BESS, expanding the roster of established players as the government and industry shift focus toward making variable renewable energy more firm and reliable compared to coal-fired thermal power plants.

Buoyed by lower global lithium prices, India also witnessed some of the lowest tariffs in clean energy projects involving storage. For instance, a solar-plus-storage project at Morena in Madhya Pradesh reported the lowest-ever tariff of ₹2.70/kWh, setting a new benchmark. The project was awarded through RUMSL.

The year also saw increased installations and heightened interest from residential consumers toward rooftop solar under the PM Surya Ghar scheme, driven by enhanced subsidies. This made rooftop solar in the retail segment a significant contributor to overall numbers. According to a recent report from IEEFA, applications under the scheme saw a nearly fourfold increase between March 2024 and July 2025, providing a boost to the previously lagging rooftop solar segment. 

“As of July 2025, PMSGY has witnessed significant traction, with over 57.9 lakh applications for residential rooftop solar installations. The scheme has facilitated the installation of 4,946 MW of rooftop solar capacity till July 2025 across various states and Union territories, indicating robust on-ground execution. Subsidy disbursements have crossed INR 9,281 crore (USD 1.05 billion) benefiting over 16 lakh households, reflecting strong financial support and household-level participation. These figures underscore growing public interest in solar adoption and the effectiveness of central incentives in accelerating clean energy uptake,” the report said.

As of December 2025, approximately 23.9 lakh households had rooftop solar systems installed under the PM Surya Ghar scheme across India, according to information furnished by the Ministry of New and Renewable Energy (MNRE) before Parliament. This deployment is estimated to be generating about 7 GW of clean energy.

Solar IPOs

The year 2025 also remained noteworthy as several solar companies entered the Indian stock market through Initial Public Offerings (IPOs). The year saw listings of major solar module and cell manufacturers such as Emmvee Photovoltaic, Saatvik Green Energy, and Vikram Solar. Companies such as solar pumps specialist GK Energy and EPC Solarworld Energy also entered the public markets.

Meanwhile, companies such as Rayzon Solar, Avaada Electro, Continuum Green Energy, and Karamtara Engineering filed their Draft Red Herring Prospectuses (DRHPs) with the Securities and Exchange Board of India (SEBI). Additionally, firms like Prozeal Energy, Goldi Solar, Cosmic PV Power, and others announced plans to issue IPOs and list on stock exchanges in due course. Many of these developments are expected to materialise in 2026, with more solar companies likely to announce market listings next year. With these, India is closer than ever to mainstreaming solar stocks, with a specific green index on the horizon as well fpr those looking to place bets on the sector as a whole. 

Rajashree Nambiar, Co-founder, MD & CEO of Ecofy, said, “2025 has been a turning point for green financing in India. With stronger policy support and clearer guidelines, the sector has moved firmly into the mainstream. Investor interest has grown, and sustainability-focused financial products are now becoming a natural part of business decisions. As the year closes, the priority for the industry is to make green finance easier to access, reduce perceived risks, and ensure climate-aligned products become an integral part of India’s financial landscape.”

Misses of 2025

Strong IPOs, Weak Stock Prices

Despite the successes of 2025, several challenges emerged as bottlenecks for the Indian solar industry. These included unsigned PPAs for multiple solar projects, as discoms appeared reluctant to commit to certain project formats in anticipation of cheaper future tariffs, IPOs trading below issue prices, lagging solar cell capacity, and rising curtailments.

Several newly listed solar companies saw their share prices fall below IPO levels, indicating that initial optimism did not translate into sustained market confidence. While many firms entered the stock market to raise funds for expansion, declining share prices and subsequent offers for sale by promoters and investors pointed to indicated all is not well. Solar pump firms in fact, faced a strong investor pushback as it became apparent that their working capital situation remained tight despite good margins and strong order books, thanks to the high dependence on government contracts under the PM KUSUM scheme. These firms saw stock prices beaten down to six month lows at the time of filing this story.

DV Manjunatha, Chairman and Managing Director of Emmvee Photovoltaics, told Saur Energy what could make a difference for solar companies. “ Indian investors are quite sharp. They can tell the difference between short-term excitement and businesses that are built to last and market behaviour is influenced by many factors. From my own experience of more than 30 years in this industry, what I have consistently seen is that companies that keep their approach simple tend to do better over time,” he said.

He added, “Staying disciplined with finances, executing steadily, and having clarity on how the business operates matters more. As the sector further matures, differentiation will come from practical things like adopting the right technologies at the right time, strengthening backward integration, and improving margins in a consistent manner. These are the fundamentals that will eventually build investor confidence.”

Cell Shortages

Another major issue faced by the solar industry—particularly installers, EPC companies, and developers—was the shortage of domestically produced DCR-compliant solar cells for projects mandating domestic content. Vendors highlighted both limited availability and higher costs, largely due to the small number of domestic solar cell manufacturers and the government’s push for a stronger DCR-compliant market.

The government has also announced the introduction of ALMM or ALCM for solar cells, making it mandatory for Indian solar module manufacturers to use only domestically produced solar cells for eligible projects from June 2026. Experts have reiterated that from 2026 onwards, more integrated firms are likely to be better positioned for survival.

“The DCR market, especially in a post-ALMM environment, provides better demand visibility for domestic manufacturers. While there may be some short-term cost pressure, over time localisation, scale efficiencies, and learning curves would improve competitiveness. Integrated manufacturers are naturally better positioned to manage these transitions and reduce external dependencies,” Manjunatha said.

Grid Constraints

National-level data also showed that solar curtailment rates rose sharply in late 2025. For instance, in October 2025, average solar generation curtailment reached about 12%, the highest level recorded by the Grid Controller of India. On some days, up to 40% of solar output was not evacuated due to grid constraints, highlighting the lack of grid preparedness for high renewable penetration.

Project developers stressed the need to focus on building a resilient energy system beyond mere capacity additions. "As India enters the next phase of its energy transition in 2026, the priority must shift from capacity addition alone to building a dispatchable and resilient energy system. This requires focused investment in three areas: grid-scale energy storage, robust transmission infrastructure, and a diversified clean energy mix,” said Srivatsan Iyer, Global CEO, Hero Future Energies.

He added, “Energy storage will be critical to maintaining grid stability and ensuring reliable, round-the-clock power as renewable penetration increases. At the same time, accelerated development of transmission networks—including high-voltage interregional corridors and smart grid technologies—is essential to move clean power from resource-rich regions to major demand centers.”

Ankit Jain, Vice President and Co-Group Head – Corporate Ratings at ICRA, noted that grid curtailments during peak renewable generation hours underscore the urgency of storage deployment and grid strengthening. He added that this comes at a time when ICRA expects electricity demand growth of 5–5.5% in FY2027, rebounding from FY2026’s muted growth of 1.5–2%.

“India added 31.2 GW of renewable capacity in 8M FY2026, up 109% year-on-year, supported by a strong project pipeline and favorable solar module prices. While bidding slowed with only 8.6 GW auctioned in 8M FY2026 amid delays in signing of PPAs/PSAs, transmission infrastructure remains a critical focus to sustain capacity expansion. Grid curtailments during peak renewable generation hours highlight the urgency for storage and grid strengthening. These measures are essential to ensure grid stability and enable the sector’s continued growth momentum and will remain the key monitorable in FY2027,” he added.

Exports Block

Even as India’s module capacity emerged as the biggest outside China, the lack of access to the US market hurts in the absence of a trade deal with that country. Not only was the US India’s largest export destination, but it also offered better margins than most other options. With that market shut out for now along with a relentless pressure on renewable energy under the current administration, many module makers have had to relook plans for further expansion, including US manufacturing as well. Other markets, where they exist, are too small or competitive to offer a viable option for now. A good 8-12 GW of prospective sales are therefore out of the picture for now for leading module players. 

Conclusion

Taken together, 2025 stands out as a watershed year for India’s solar and renewable energy sector—one that delivered unprecedented growth while simultaneously exposing the structural challenges that lie ahead. 

While the manufacturing side will continue to see strong momentum as new cell, and more module capacities come online, other measures like the settlement of the GIB (Great Indian Bustard) issue by the Supreme Court also opens up space for over 20 GW of new capacity in Rajasthan and Gujarat. As pointed out, large players have pushed for integration across the solar chain, seeing this as a generational opportunity that they are confident of tackling on their own. That explains the rush of developers into manufacturing, for instance. In many ways, 2026 could be the year of consolidation, as firms come to grips with their new expansions outside core areas and serving existing market demand. At some stage, critical schemes like PM KUSUM will be redesigned to hopefully expand coverage to smaller farmers, and states where it has not clicked yet. A target date for domestic wafer manufacturing, expected by 2028, will also be announced, putting additional pressure on smaller module players. Today, 1 GW is the minimum cutoff for a serious player, and this size will only go up as more demands are placed for domestic sourcing. 

Perhaps most significant will be the roll out of BESS linked projects bid out in 2025, as a successful experience there will drive strong incremental solar and wind demand as well. From a backup of 2 hours to 4 hours to possibly 8 hours by the year end, expect BESS tenders to evolve during 2026 to emerge as Solar’s biggest support pillar. 

In all this, India’s famous value seeking behaviour will rule. Should prices go up in solar or BESS, every 5% increase could mean a higher slowdown in demand in a price sensitive market. So eyes will continue to be trained on the China market, so critical to BESS and solar even today, to look for price signals. So far, the Chinese have delivered with lower prices despite making noises about price controls and more. Will that hold in 2026 is the billion dollar question now.