Report Overview

According to estimates, the India solar energy market is expected to grow vigorously in the coming years due to the governmental projects that are slated to start in the coming years. In addition to this, a number of major solar energy projects are already in their Phase II's, which is bolstering the growth of the India solar energy market.

India solar energy market - Industry Trends & Forecast Report 2028

India solar energy market is expected to grow at a CAGR of 7.8% during the forecast period (2022-2028). The solar energy market in India is expected to grow due to the growing focus on the use of renewable energy over conventional energy methods, along with the rising number of government initiatives and subsidies, and reduced prices of solar panels. Additionally, the rising investment by numerous companies in solar-driven technologies all over India are driving the growth of India solar energy market.

Solar Energy: A Brief Overview

Solar energy is capable of generating heat, electricity and creating chemical reactions. Solar energy may become the primary source of electricity in the coming years if it can be harnessed in a way that meets customer needs. As a renewable resource, solar energy cannot be exhausted and is non-polluting, which is ideal for the current world scenario. There are three major ways of harnessing this energy: photovoltaics, solar cooling & heating, and concentrating solar power. A photovoltaic system uses sunlight directly to generate electricity. Depending on the size and the way it is implemented, it can generate a lot of power for equipment, homes, and industrial purposes. In contrast, concentrating solar power (CSP) and solar heating & cooling (SHC) both leverage the heat generated by the sun for space or water heating, besides powering traditional electricity-generating turbines.

India solar energy market Trend

Growth Drivers

Growing Adoption Rates of Renewable Energy Across India

With the decade long incentives for solar panels, India is slowly becoming a hub of utilizing renewable energy.  According to the Ministry of New and Renewable Energy, India is currently ranked 5th globally for total renewable energy installation, making it an attractive destination for foreign investors seeking sustainable measures for their businesses or to generate value from this opportunity. The Ministry also estimates that solar capacity across the nation has increased exponentially in the past seven years registering a growth of 93.80% from 2.6 GW to 42 GW in 2020. Such a growing adoption rate of renewable energy indicates an inclination toward the solar energy, which is a contributing factor for the growth of the India solar energy market.

Growing Number of Initiatives to Support the Growth of Solar energy

The Indian government has been started focusing on developing and incorporating more solar energy in every aspect of the businesses and households established across the nation. The prime example being the rising number of schemes and initiatives aimed at augmenting the solar and renewable energy capacities to 25,750 MW by the end of 2022 with fund allocation from the central government reaching an amount of USD 4.59 billion, which includes service charges for implementing agencies. The Ajay Jyoti Yojana scheme, presently in Phase-II is expected to cover installation for more than 3,04,500 Street Lights powered by solar energy across Uttar Pradesh, Jharkhand, Bihar, Assam and Odisha, which have already been covered under the Phase-I of the Scheme owing to the rapid demand arising from these states, which have been bolstering the upcoming growth years for the India solar energy market.

Restraints

Recent price fluctuations are making it a costly affair

Solar panels, which have enabled its customers to enjoy a great decade of lower prices, with the price reductions exceeding 90% in the past decade, are now going uphill. Solar module raw materials have been found to be the major factors attributing to the growing prices of the solar panels. The reduced supply of polysilicon, a pivotal raw material has registered a jump of about four times its previous prices since the beginning of 2021, which has left the solar panel prices to soar by more than 18% for the year 2021. Many large-scale projects across the country will suffer over the next few years, with industry experts stating that the Indian government may run out of panels for over 10 GW capacity projects, which is hindering the growth of India's solar market.

Impact of COVID-19 – India Solar Energy Market

The COVID-19 pandemic has drastically impacted the growth of the India solar energy market. The Indian government, unlike the majority of developed countries around the world, began lockdown measures earlier to curb the spread of the virus. Therefore, production in the country had drastically declined as no production activity was carried out other than emergency services, leading to a severe decline in solar panel production. As a result, solar panel prices across the country spiked, which left the growing adoption of solar energy at a standstill, negatively impacting the growth of the India solar energy market.

Moreover, social distancing norms caused managers to postpone their projects and to halt the evaluation of solar panels across the various grids. The financial impact on the pockets of individuals contributed to the decline of the Indian solar energy market. However, the growing vaccination rates across the nations has ignited some hopes for the production to continue and reach the pre-pandemic levels before 2023, which seems to bolster the market’s growth and enhance the supply chain of solar panels, thereby positively impacting the growth of the India solar energy market.

India Solar Energy Market: By Technology

Based on technology, the India solar energy market is bisected into Solar Photovoltaic (PV), and Concentrated Solar Power (CSP). The solar photovoltaic segment accounted for the largest share in the market in 2021 and is anticipated to grow at a robust CAGR during the forecast period. India is in its pursuit to achieve the world's largest known renewable energy expansion program, which is anticipated to achieve a level of more than 175 GW by the end of 2022. Such schemes, accompanied by the growing measures by the government to subsidize the adoption of solar panels for agricultural purposes, have bolstered the demand for solar photovoltaic segment and correspondingly contributing to the growth of the India solar energy market.

India Solar Energy Market: By Application

Based on applications, the India solar energy market is segmented into residential, commercial, and others. The commercial segment accumulated the largest share in the India solar energy market in 2021. In contrast to this, the residential solar energy market is projected to witness the fastest growth in the coming years. Being majorly driven by coal, the Indian households may start witnessing a growing inclination toward renewable energy consumption. In the coming years, solar energy is expected to outperform coal consumption. According to the International Energy Agency, India's coal consumption is expected to reach 62 GW by 2020 and 32 GW by 2025. This indicates a growing inclination toward solar energy, which is projected to increase solar power consumption by households and thereby contribute to India's solar energy market.

India Solar Energy Market: Regional Insights

The India solar energy market is segmented into four regions North India, East India, West India and South India. The Southern region of the country have garnered the largest share in the market in 2021. Growing industrialization is contributing to the growth of the region. Karnataka boasted the largest solar energy production across the country at around 7355.17 MW for the year 2021. Other states contributing to the growth of the Indian solar energy market include Andhra Pradesh (4203 MW), Telangana (3953.1 MW), and Tamil Nadu (4475.2 MW). In the coming years, the increasing number of industrial projects across these states is projected to increase the demand for electricity, which can be met only by solar energy capacities, hence contributing to the growth of the India solar energy market.

India Solar Energy Market - Competitive Landscape

Some of the key players in the India solar energy market are Adani Group, Azure Power Global Limited, Mahindra Susten Pvt. Limited, Sterling and Wilson Pvt. Limited., Tata Power Solar Systems Limited, Bharat Heavy Electricals Limited, Solar Semiconductor Private Limited, Moser Baer Solar Limited, Central Electronics Limited, WAAREE, HHV Solar Technologies Private Limited, Lanco Solar Energy Private Limited, Jinko Solar Holdings Co. Limited, SMA Solar Technology AG, Trina Solar Limited, and other prominent players. The market players have started witnessing a growing consolidation in the market owing to the rapid adoption of latest technologies.

Scope of the Report:

By Technology

• Solar Photovoltaic (PV)
• Concentrated Solar Power (CSP)Hybrid

By Solar Module Type

• Monocrystalline
• Cadmium Telluride
• Polycrystalline
• Amorphous Silicon Cells
• Others

By Application

• Residential
• Commercial
• Others

By Deployment

• Rooftop
• Ground-Mounted

By Region

• North India
• East India
• West India
• South India