Solar Power Leads India's Energy Growth In FY26: Report

(MENAFN- KNN India) New Delhi, Sep 22 (KNN) Solar energy has become the driving force of India's electricity sector, accounting for over 85 per cent of the 20 GW of new capacity added in the first five months of FY26, according to a report by SBI Capital Markets (SBICAPS).

The study projects that more than 45 GW of solar capacity will be installed this year - the highest-ever annual addition for the country.

India's installed solar capacity has expanded more than 3.4 times in the past five years, overtaking wind in FY21 to become the country's largest renewable source.

Policy support, falling module prices, and green energy goals have accelerated this shift. A reduction in GST on renewable components from 12 per cent to 5 per cent is further expected to cut installation and maintenance costs.

More than 20 per cent of installed solar now comes from rooftop and open-access systems, highlighting growing consumer demand. Programmes like the PM Surya Ghar Muft Bijli Yojana are set to push rooftop adoption further in both urban and rural areas.

On the supply side, the government's Approved List of Models and Manufacturers (ALMM) is strengthening India's solar manufacturing base. ALMM-I helped the country surpass 100 GW of solar module capacity.

ALMM-II, starting June 2026, will include solar cells, while a proposed ALMM-III could cover wafers by 2028, subject to adequate domestic capacity.

The report highlights that competition will increasingly depend on efficiency, quality, and integrated facilities, with manufacturers shifting towards advanced technologies like n-type TOPCON and HJT modules.

Although Q1FY26 saw robust GDP growth, energy demand remained flat due to heavy monsoons reducing cooling and irrigation needs. SBICAPS expects demand to pick up during the festive season with industrial recovery and the retreat of rains.

(KNN Bureau)

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