India Solar Energy Market Growth and Forecast Report, 2026-2035
India’s solar energy market is set to reach USD 69.68B by 2035, driven by policy support, utility-scale growth, rooftop expansion, and grid modernization.
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.
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%.
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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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