India recorded its highest-ever annual solar capacity addition in the calendar year 2025, installing 36.6 GW, a 43% increase over the 25.6 GW added in 2024, according to Mercom India’s Q4 and Annual 2025 India Solar Market Update Report. This milestone underscores the sector’s strong growth momentum, supported by favorable policies, faster project execution, and improved market conditions.

India’s rooftop solar capacity grew to 7.1 GW in the calendar year 2025, an over 123% year-over-year (YoY) jump from 3.2 GW in 2024, according to Mercom India Research’s newly released Q4 & Annual 2025 India Rooftop Solar Market Report. Rooftop solar accounted for more than 19% of the total solar installations in the year. Residential consumers accounted for almost 76% of the total rooftop solar installations in 2025.

India added 7.8 GW of solar open access capacity in 2025, a largely flat 0.5% YoY growth from 7.7 GW, according to Mercom’s Q4 & Annual 2025 India Solar Open Access Market Report. India’s cumulative installed solar open access capacity exceeded 30 GW as of December 2025. In the fourth quarter (Q4) of 2025, the country added open access solar capacity of 1.6 GW, down approximately 29% from 2.2 GW in Q3 and over 32% YoY from 2.3 GW.

Solar power accounted for 26.5% of India’s total installed power capacity and 52.7% of the total installed renewable energy capacity as of December 2025. Solar installations rose 8.8% quarter-over-quarter and 39.6% YoY India’s renewable energy capacity, including large hydroelectric projects, reached 258.3 GW by the end of Q4 2025, accounting for 50.2% of the country’s total installed power capacity, based on data from the Central Electricity Authority (CEA), the Ministry of New and Renewable Energy (MNRE), and Mercom’s India Solar Project Tracker.

India’s top states fostering open access power have emerged as the core engines of industrial electricity demand growth, driven by manufacturing clusters, rising captive generation, and accelerating adoption of renewable energy. Data from successive CEA reports over the past few years show that industrial electricity consumption and captive capacity have expanded in tandem, which mandates non-discriminatory open access to transmission and distribution networks.

Rooftop solar installers in Maharashtra are up in arms over a reported change in capacity approval criteria by Maharashtra State Electricity Distribution Company, calling it a move to restrict system sizing. Multiple installers told Mercom India that rooftop solar approvals from February 13 are being processed based on the average electricity consumption over the past 12 months rather than the sanctioned load/contract demand.

Commercial and industrial (C&I) entities, large institutions, and residential complexes are increasingly turning to clean power solutions that offer greater cost efficiency than conventional grid tariffs. Rooftop solar has long been an attractive option for reducing operating expenses and enhancing sustainability credentials. However, beyond on-site installations, solar open access is rapidly emerging as a scalable alternative, enabling businesses to procure renewable energy at larger volumes while optimizing long-term cost savings.

Tamil Nadu’s C&I renewable energy market is entering a more mature phase, where the discourse is shifting from simple tariff savings to long-term strategy, infrastructure planning, and export competitiveness. As of December 2025, renewable energy accounted for 57.5% of Tamil Nadu’s power mix, with solar at 20% and wind at 29%, while thermal power contributes 39%.

With the June 1, 2026, deadline for mandatory sourcing of solar cells from the Approved List of Models and Manufacturers List-II fast approaching, solar developers are urging the MNRE to consider a time-bound extension, citing concerns over limited operational Tunnel Oxide Passivated Contact capacity and potential project delays.

China’s recent decision to cancel value-added tax (VAT) rebates on exports of solar and related products from April 1, 2026, is likely to increase project costs for India’s solar and battery energy storage system (BESS) developers. The export VAT rebate rate for battery products will be reduced from 9% to 6% from April 1 to December 31, 2026, China’s Ministry of Finance and State Taxation Administration announced in January.

Aggressive bidding is rapidly becoming the defining feature of India’s energy storage tender landscape, raising concerns among stakeholders. As competition intensifies and tender volumes rise, discovered tariffs for BESS have converged sharply, raising a critical question for the sector: are today’s prices truly reflective of bankable projects, or are they setting the stage for long-term instability?

The Union Budget 2026 provided a new focus to India’s renewable energy strategy, moving from capacity addition to developing a sustainable, resilient domestic clean energy ecosystem, with energy storage systems as the key pillar. Industry stakeholders across the renewable energy value chain have broadly welcomed the government’s emphasis on energy storage to manage intermittency and strengthen grid reliability.

Despite record-low renewable energy tariffs, several states have entered long-term thermal power purchase agreements at significantly higher tariffs of ₹5.38 (~$0.059)-₹7.27 (~$0.079)/kWh, reflecting concerns over supply security, baseload requirements, and renewable intermittency. In recent months, several states have signed multiple power purchase agreements for coal-based thermal power.

A committee constituted by the CEA called for operating thermal power plants at a minimum technical load (MTL) of 40% and adopting two-shift operations to support grid stability amid increasing renewable energy integration. In a draft report on the wear and tear, operations and maintenance, and plant lifespan implications of coal-fired power plants due to flexible operations, the committee concluded that operating thermal plants at 55% MTL had not resulted in significant damage attributable solely to flexible operation, countering concerns raised by NTPC over wear and tear due to low-load running.

The Jaipur Vidyut Vitran Nigam issued an order allowing consumers to install hybrid inverters alongside their rooftop solar systems under the net metering, gross net metering, and virtual net metering frameworks. The order highlights the growing importance of battery energy storage systems for grid stability, peak-load management, and power-quality improvement.

The MNRE sought feedback from the states on the draft reports prepared by the National Institute of Solar Energy and the Indian Institute of Technology Roorkee on the potential of floating solar and the policy framework. The documents assess India’s floating solar potential and propose a policy framework covering site identification, project execution guidelines, stakeholder roles, approvals, scheduling, and measures to reduce risks for developers and investors.

The CEA has begun assessing the manufacturing capacity of grid-forming inverters (GFM) in India, in light of the increasing share of solar and wind energy in the country’s power mix. In a letter to GFM manufacturers, the CEA said GFM is necessary to ensure a stable, reliable electricity grid.

Over 1,600 MW of renewable energy capacity is at risk of having its grid connectivity revoked due to non-compliance with General Network Access regulations. According to a tentative list notified by the Central Transmission Utility, 15 solar, wind, and hybrid projects with a cumulative capacity of 1,622 MW have yet to declare commercial operation, with compliance dates falling between January and April 2026.

The U.S. Department of Commerce announced its preliminary determination of countervailing duties of up to 125.87% on crystalline silicon solar cells, whether or not assembled into modules, imported from India. The preliminary duties were announced following an investigation after trade petitions were filed by the Alliance for American Solar Manufacturing and Trade last July.