India's Solar Surge: Aiming for 500GW by 2030

India's solar industry is forecast to reach 214GW by 2030, up from 82GW in 2024, fueled by government initiatives and increased domestic production. The sector benefits from policies and trade barriers against Chinese imports, though over-capacity and competition remain challenges.

India's solar sector anticipates significant growth over the next decade, targeting 500GW of renewable energy by 2030. Current figures from a Kotak Institutional Equities report indicate solar capacity will rise to 214GW from the existing 82GW, spurred by government-led initiatives such as the PM Surya Muft Bijli Yojana and PM-KUSUM scheme.

The report outlines the expected progress of India's energy capacity increase to 641GW by FY2030, predominantly led by solar contributions. This growth is expected to be supported by utility-level installations, rooftop solar projects, solar pumps, and captive industrial upgrades.

India has already achieved 70GW in solar module installations and 7GW in solar cell capacity as of FY2024, with plans for an additional 84GW in solar cell capacity over three years. However, actual installation rates may lag due to longer lead times. Alongside renewable additions, the National Green Hydrogen Mission could further drive demand.

Strategic government initiatives such as trade barriers and production-linked incentives have bolstered domestic solar manufacturing capabilities. The US imposition of tariffs on Chinese imports and measures like the Uyghur Forced Labor Prevention Act also play influential roles.

Maintaining and expanding these policies appears crucial for sustained growth in India's solar manufacturing sector. Current valuations suggest favorable market conditions, but future expansion could temper profit margins and returns. Nonetheless, integrated manufacturers and those with operations in the US are poised for higher profitability.

The Kotak report emphasizes the risk posed by potential over-capacity, anticipating increased competitive pressures that could affect margins post-2028. India's solar sector continues its trajectory of remarkable growth, while keeping an eye on the challenges ahead.

(With inputs from agencies.)