The Q1 2025 India Solar Market Update by Mercom India reveals that India installed 6.7 gigawatts (GW) of solar capacity in the first quarter of 2025, marking a 25% decrease compared to the 9 GW added in Q1 2024. This decline is attributed to several factors, including insufficient substation capacity, transmission infrastructure challenges, land acquisition issues, delays in power purchase agreement (PPA) signings, and a significant shortage of domestically manufactured modules, which led to procurement hurdles for developers.
Of the total installations in Q1 2025, large-scale solar projects accounted for 5.5 GW, representing 82% of the quarter’s additions. Open-access projects contributed 19.8% of this large-scale capacity. Rooftop solar installations made up the remaining 18%. Rajasthan and Gujarat led the large-scale solar installations, accounting for 35% and 30% respectively, followed by Maharashtra at 16%.
As of March 2025, India’s cumulative installed solar capacity reached 104.6 GW, with large-scale projects contributing over 86% and rooftop solar nearly 14%. Solar energy now accounts for 22% of India’s total installed power capacity and 48% of the total installed renewable energy capacity.
The quarter also saw a decrease in solar project tenders and auctions. Tenders totaling 14.4 GW were announced, down 53% year-over-year, while 6.4 GW of solar projects were auctioned, a 74% drop compared to the same period in the previous year. The average cost of large-scale solar projects increased by 3% quarter-over-quarter and 1% year-over-year.
Despite the short-term challenges, India’s solar sector continues to grow, with a large-scale solar project pipeline of 180.4 GW and an additional 127.8 GW of projects tendered and pending auction at the end of Q1 2025. The industry emphasizes the need for clear and stable policies to balance local manufacturing with seamless project development to meet the country’s renewable energy goals.
Source: Mercom India & ET Energy World
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