India added solar projects totaling 18 GW in 1H 2025, a 31% YoY increase from the same period last year, according to Mercom India Research’s newly released Q2 2025 India Solar Market Update. In Q2 2025, India added 11.3 GW of solar capacity, a 145.4% YoY increase from 4.6 GW and a 66.9% increase from Q1 2025. Solar accounted for 64% of new power capacity additions in Q2 2025. In 1H 2025, solar project commissioning in India accelerated due to regulatory deadlines.

India generated approximately 43 billion units (BU) of solar power in the second quarter (Q2) of the calendar year 2025, a 19.2% year-over-year (YoY) increase. Solar generation was up by 2.5% quarter-over-quarter (QoQ) from 42.1 BU. Rajasthan, Gujarat, Tamil Nadu, Karnataka, and Maharashtra were the top states for solar power generation. Rajasthan continues to be the highest generating state with 15.9 BU, followed by Gujarat, Tamil Nadu, Karnataka, and Maharashtra with 5.9 BU, 4.7 BU, 4.1 BU, and 2.3 BU generated, respectively.

India’s renewable energy capacity, including large hydroelectric projects, made up 48.3% of the country’s cumulative power capacity, with 234.2 GW installed at the end of the second quarter (Q2) of 2025, according to data from the Central Electricity Authority, the Ministry of New and Renewable Energy, and Mercom’s India Solar Project Tracker. Solar power accounted for 24% of the total installed power capacity and 49.7% of the total installed renewable capacity as of June 2025.

Solar tender issuance in India fell sharply in Q2 2025. According to Mercom India Research, just 6.5 GW of solar tenders were announced—down 53.8% QoQ from 14.1 GW, and 65.1% lower than the 18.7 GW issued in the same quarter last year. Auction activity followed the same trend. Only 1.6 GW of utility-scale solar projects were auctioned in the quarter, a steep 74.1% drop from 6.4 GW in Q1 2025 and a 75.2% compared to Q2 2024.

India’s rising solar export sector has been dealt a severe blow with the U.S. imposing 50% import tariffs. The U.S. has been the prime destination for Indian solar cell and module manufacturers, but that could soon change. Taking the cue from global trade and geopolitical developments, Indian exporters appear ready to look at other markets. In the first quarter of 2025, the U.S. accounted for 99.5% of the total exports of solar cells and modules. The quarter saw exports rise 26.1% from the previous three months to touch $267.6 million (~₹23.1 billion).

India’s ambitious bid to lead the global renewable energy transition is running into a significant obstacle: a shortage of skilled workers. Industry leaders say this talent gap is driving up costs, delaying projects, and reducing productivity. Without urgent intervention, the shortfall could undermine the country’s clean energy targets and global climate commitments. A senior executive at a major Indian cell manufacturer said the current situation needs an immediate solution.

Corporate funding for energy storage companies fell sharply in the first half (1H) of 2025 to $9.1 billion across 55 deals, according to Mercom Capital Group’s 1H and Q2 2025 Funding and M&A Report for Energy Storage. This represents a 41% YoY decline from $15.4 billion, resulting from 64 deals, in the same period of 2024. The downturn was attributed to the uncertainty surrounding multiple policy and tariff changes in the U.S., including proposed cuts to the  Investment Tax Credit and several provisions of the Inflation Reduction Act.

India added 1.6 GW of wind energy capacity in Q2 2025, a 113% YoY increase from 769 MW in Q2 2024, according to Mercom India Research. Capacity additions fell 13% quarter-over-quarter. Installations declined due to delays in grid connectivity, limited availability of transmission infrastructure, land acquisition challenges, and right-of-way issues. Gujarat led the capacity additions in the quarter with 1.14 GW. Karnataka added 363.6 MW. Of the remaining 134 MW, Tamil Nadu contributed 90 MW, Maharashtra and Andhra Pradesh added 23.1 MW and 20.6 MW, respectively.

The increasing demand for TOPCon bifacial solar modules raised concerns among industry professionals about their potential for unsafe installation, particularly on sheet metal roofs. TOPCon bifacial modules, which are primarily manufactured in glass-to-glass format, are not ideally suited for installation above sheet roofs due to their structural and performance requirements. These modules are designed to capture sunlight from both sides, offering higher system efficiency. However, installing them on opaque, unventilated sheet roofs blocks rear-side exposure to light and traps heat.

For nearly a decade, India’s interstate transmission system charges waiver quietly shaped renewable power economics. By lowering landed tariffs on interstate sales, it encouraged the adoption of corporate open access and gave developers the confidence to scale. That cushion is now disappearing. The full waiver for solar and onshore wind expired on June 30, 2025, and has been replaced with a phased taper that will run until June 30, 2028. The new framework reduces charges by 75% in FY 2026, 50% in FY 2027, and 25% in FY 2028 before complete withdrawal.

Kerala witnessed an unprecedented drop in monthly rooftop solar capacity additions, as low as 12 MW in July this year, compared to an average monthly installation of 35 MW, due to an unfavorable regulatory proposal by the Kerala State Electricity Regulatory Commission (KSERC) that impacted the segment. According to KSERC’s draft order, net metering for rooftop solar systems is limited to projects with a capacity of up to 3 kW. For projects between 3 kW and 5 kW,  there is a mandate to include an energy storage system of up to 30% of the project size.

The Ministry of New and Renewable Energy (MNRE) has issued the first Approved List of Models and Manufacturers (ALMM) List-II for solar cells, enlisting nine domestic manufacturers with a cumulative annual production capacity of 13,067 MW. The ALMM List-II will come into effect from July 1, 2026. The notified list includes Mundra Solar Energy (Adani) has been enlisted for a capacity of 1,939 MW/year for its bifacial Mono c-Si PERC cells. These cells offer 23.35% efficiency and 7.72 W output. Mundra Solar has been enlisted for a capacity of 1,893 MW.

The Ministry of New and Renewable Energy (MNRE) has renamed the Revised List of Models and Manufacturers (RLMM) of Wind Turbines as ALMM (Wind). The ministry has also mandated the use of major wind turbine components such as Blade, Tower, Gearbox, Generator, and Special Bearings (Main, Pitch, and Yaw Bearing) from the Approved List of Models and Manufacturers (Wind Turbine Components) in the manufacturing of listed wind turbines. The ALMM (Wind Turbine Components) list will be issued by MNRE separately.

The Ministry of Power has issued amendments to the operational guidelines of the Viability Gap Funding (VGF) program for Battery Energy Storage System (BESS) projects, which are supported through the Power System Development Fund. The Ministry issued operational guidelines for the ₹94 billion (~$1.1 billion) program to provide a VGF of up to 40% for developing 4,000 MWh of BESS capacity across the country. One amendment allows BESS projects to be connected to either the Intra-State Transmission System or the Inter-State Transmission System.

The Ministry of Power has exempted off-stream closed-loop pumped storage projects, irrespective of the quantum of capital expenditure, from the requirement of concurrence by the Central Electricity Authority (CEA). However, the developers of such PSPs must seek technical guidance from the CEA, the Ministry said in a gazette notification. The notification said hydroelectric generating stations, involving an estimated capital expenditure exceeding ₹30 billion (~$342 million), will require the CEA’s concurrence.

The Ministry of Power has ended the uniform renewable energy tariff (URET) mechanism in response to concerns of renewable energy implementing agencies and developers over the reluctance of procurers to sign power purchase agreements. The Ministry said that in light of the substantial renewable energy capacity awaiting the signing of power sale agreements and to expedite the deployment of renewable energy, it had decided to withdraw the URET mechanism. In February 2024, the government announced the commencement of a ‘Solar Power Central Pool’ and ‘Solar-Wind Hybrid Central Pool’ under URET for three years until February 2027.

The Supreme Court of India has directed the states to clear the pending dues of approximately ₹1.74 trillion (~$19.72 billion) owed to distribution companies within four years. New dues created after April 1, 2024, must be liquidated within three years. The Court said the practice of creating dues, termed as ‘regulatory assets’ by electricity regulatory commissions, cannot be allowed to continue unchecked. Such regulatory assets, which represent unrecovered costs of distribution licensees deferred to future tariff periods, must only be created in exceptional circumstances and must be liquidated within a specified time.

The Ministry of New and Renewable Energy (MNRE) has extended the deadline for solar inverters of more than 200 kW capacity to conform to the Bureau of Indian Standards to June 30, 2026. MNRE’s requirements include utility-interconnected solar inverters and power inverters used in solar systems. However, the inverters must have valid Importer Exporter Code (IEC) certificates corresponding to Indian standards (IS 16221 (Part 2): 2015/ IEC 62109-2: 2011 & IS/IEC 61683: 1999 for power inverters.

MNRE issued revised program guidelines for implementing pilot projects using green hydrogen and its derivatives in the residential, commercial, and decentralized sectors that were previously not mentioned in earlier programs. The revised guidelines focus on deploying green hydrogen in off-grid, localized, community-based applications. Decentralized production models using rooftop solar, small or micro hydropower, floating solar, biomass, and wastewater will be key features of the pilot projects.

MNRE has limited solar projects under the PM Surya Ghar: Muft Bijli Yojana in utility-led aggregator/renewable service company mode for rooftop solar power projects. Ground-mounted projects, or any other aggregator models like community solar or off-site installations, can only be included under the ULA/RESCO mode under the program with the explicit permission of MNRE. The Ministry has also limited solar power projects under the program in capital expenditure mode to ground-mounted and elevated solar power projects.

MNRE has clarified that government solar projects under net metering, behind-the-meter, and open access mechanisms are exempt from using cells under List-II of ALMM if the bid submission deadlines fall on or before the cutoff date of August 31, 2025. Such projects must only comply with the ALMM List-I mandate for modules.

If India must install 500 GW of non-fossil fuel-based energy capacity by 2030, the states would require a cumulative grant of ₹140.64 billion (~$1.6 billion) every year over the next five years, according to the National Council of Applied Economic Research. These funds must be devolved to the states by the Finance Commission in the form of green energy grants, considering the potential, installed capacity, and current trend in spending on renewables, it said in a report, ‘Public Financing for Renewable Energy Sector Development: Recommendations for the 16th Finance Commission.’

The Ministry of Heavy Industries has modified the incentives for electric three-wheelers (e-3W) under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) program. The incentives have been modified for two segments. For the first segment (registered e-rickshaws and e-carts), the Ministry reduced the incentives to ₹2,500 (~$28.56)/kWh, capped at ₹12,500 (~$142.79) per vehicle for the financial year (FY) 2026, from ₹5,000 (~$57.12)/kWh, capped at ₹25,000 (~$285.59) per vehicle for FY 2025.

The Meghalaya State Electricity Regulatory Commission has notified the “Intra-State Deviation Settlement Mechanism (DSM) and Related Matters Regulations, 2025” applicable across the entire state. The regulations aim to establish a structured commercial framework to manage deviations from the scheduled electricity injections or drawal by grid-connected entities. These rules align with the Central Electricity Regulatory Commission’s DSM Regulations, 2024, and aim to ensure grid reliability, frequency discipline, and equitable penalization of deviation-related imbalances.

The Odisha Electricity Regulatory Commission has issued the draft Intrastate Deviation Settlement Mechanism and Related Matters Regulations, 2025, to establish a commercial mechanism to ensure grid users’ adherence to scheduled electricity drawal and injection, and maintain grid security and stability. Stakeholders can submit their comments and suggestions by August 30, 2025. These regulations will apply to electricity sellers and buyers who use the intrastate transmission or distribution system through open access.

The Chhattisgarh State Electricity Regulatory Commission has issued the draft Renewable Purchase Obligation (RPO) and REC Framework Implementation (Second Amendment) Regulations, 2025, proposing sweeping changes to the state’s renewable energy procurement norms. The amendments introduce new RPO categories, revised multi-year obligation trajectories, mandatory compliance by captive fossil fuel-based cogeneration users, and an energy storage obligation applicable to all obligated entities.

The Haryana Electricity Regulatory Commission (HERC) has issued a draft of the second amendment to “HERC (Rooftop Solar Grid Interactive Systems Based on Net Metering/Gross Metering), Regulations, 2021,” relating to rooftop solar grid-interactive systems, proposing key changes in energy accounting and surplus power compensation. Under the draft amendment, distribution licensees must compensate surplus electricity injected at the end of April for the March settlement period at 75% of the last discovered Solar Energy Corporation of India tariff for solar energy, or at a reference rate determined by the Commission.

The Maharashtra Electricity Regulatory Commission has released the Draft Deviation Settlement Mechanism and Related Matters Regulations, 2025, proposing significant changes to deviation accounting, scheduling, despatch, and financial settlements in the state’s power sector. These regulations will apply to all generating stations connected to the intrastate transmission and distribution system, including conventional power generators, solar and wind generating stations, bagasse/biomass-based cogeneration plants, captive generators, buyers, including distribution licensees and open access consumers, and all entities engaged in wheeling, banking, or self-consumption of electricity.

The Arunachal Pradesh State Electricity Regulatory Commission (APSERC) has set the State a target of meeting 43.3% of its energy requirements from renewable sources by FY 2030. The new RPO targets will remain valid till FY 2030. Earlier, the APSERC had set a RPO target of meeting 20.5% of power requirements from renewable energy, with 12.5% coming from non-solar energy and 8% from solar energy by FY 2025.

The West Bengal Electricity Regulatory Commission has issued the West Bengal Electricity Regulatory Commission (Grid Interactive Rooftop Solar Photovoltaic System for Prosumers) Regulations, 2025, which applies to all grid-interactive rooftop solar systems installed by prosumers connected to distribution licensees. Prosumers retain the same rights as general electricity consumers and may install rooftop systems independently or through service providers under the renewable energy service company or the utility-led aggregation models, on a first-come, first-served basis.

The Andhra Pradesh Electricity Regulatory Commission has proposed introducing virtual net metering, allowing groups of consumers, such as housing societies and residential complexes, to export solar power to the grid through a gross meter. The exported energy will be allocated among members in proportion to their ownership share. Net imports from the grid will be billed at the applicable retail tariff, while surplus exports will be compensated at the feed-in tariff fixed by the Commission.

The Bihar Electricity Regulatory Commission has issued the draft regulations for the deviation settlement mechanism. The regulations apply to all intra-state and grid-connected entities in Bihar, including distribution licensees and deemed distribution licensees. It will also apply to open access consumers (both partial and full) connected to the intra-state transmission system (InSTS). The renewable energy generation stations connected to these InSTS must have at least 5 MW of exportable capacity.

The Telangana Electricity Regulatory Commission has issued regulations for grid-interactive rooftop solar, introducing a comprehensive framework governing metering for consumers in the state. The framework titled Telangana Electricity Regulatory Commission (Rooftop Solar Photovoltaic (PV) Grid-Interactive Systems) Regulations, 2025 will apply to distribution licensees, eligible consumers, and third-party owners of rooftop solar PV systems.

The Bihar Electricity Regulatory Commission has released the draft Bihar Electricity Regulatory Commission (Terms and Conditions for Tariff Determination from Renewable Energy Sources) Regulations, 2025. The draft regulations are designed to govern tariff determination for renewable energy projects scheduled for commissioning between FY 2026 and FY 2028. The draft regulations cover all renewable energy projects commissioned during the control period.

The West Bengal Electricity Regulatory Commission has issued an order, determining the feed-in tariff for net billing and gross metering under the West Bengal Electricity Regulatory Commission (Grid Interactive Rooftop Solar Photovoltaic System for Prosumers) Regulations, 2025. The Commission has already released tariff orders for all distribution licensees for FY 2026; hence, a separate order was required to finalize the feed-in tariffs for prosumers.