India’s solar sector is entering a decisive new phase. Starting September 1, 2025, all tenders require developers and installers to use solar modules compliant with the Approved List of Models and Manufacturers (ALMM) List-II for solar cells. While the government’s push for domestic manufacturing is widely supported, the transition is expected to be uneven, with developers warning of cost increases and possible delays, and manufacturers racing to add capacity in time.

India added 2.8 GW of rooftop solar capacity in the first half (1H) of 2025, according to Mercom India’s newly released Q2 2025 India Rooftop Solar Market Report. The installations grew 158% year-over-year (YoY). During the second quarter (Q2) of 2025, 1,618 MW of rooftop solar systems were installed, an almost 33% increase from 1,216.6 MW in Q1 2025, and an over 121% increase from the 731 MW installed in Q2 2024. The installation growth in 1H and Q2 of 2025 was mostly driven by the clearance of delayed registrations under the PM Surya Ghar: Muft Bijli Yojana, the commissioning of new systems, and enhancements to the PM Surya Ghar portal.

Nearly 4 GW of wind-solar energy has been curtailed in Rajasthan since March 2025 due to delays in transmission projects and lower power demand resulting from above-normal rainfall in north India. In March 2025, several developers in Rajasthan received notices from the regional load dispatch centres about time-block-wise curtailment of renewable energy. The curtailment, which started at 8.5% in March, rose to 51.5% by August. Solar and wind projects were granted a ‘must-run’ status in 2021.

The average system cost of large-scale solar projects fell again in the second quarter of 2025, continuing the steady downward trend. Indian TOPCon-based projects remain the most expensive, while Chinese mono PERC projects continue to come in at the lowest cost. On a quarterly basis, costs declined across the board. Indian DCR TOPCon dropped 1.3%, Indian DCR mono PERC 1.2%, Indian TOPCon 1.6%, Indian mono PERC 3.5%, Chinese TOPCon 1.5%, and Chinese mono PERC 1.5%. Chinese mono PERC accounted for the lowest share of total project cost at 38.9%, while Indian DCR TOPCon stayed at the top at 61.9%.

India added nearly 3.8 GW of solar open access capacity in 1H 2025, an over 4% decrease from 3.9 GW installed in the same period of 2024, according to Mercom India’s Q2 2025 Solar Open Access Market Report. Installations in 1H 2024 were higher as many open access developers expedited project commissioning before the reimposition of the Approved List of Models and Manufacturers. However, installations for 1H 2025 saw a slight dip, mainly due to delays in connectivity approvals and the limited availability of transmission infrastructure in Q1.

The reduction in Goods and Services Tax (GST) from 12% to 5% on solar cells and other renewable energy devices is likely to lower power costs for consumers while enhancing project viability for developers. Besides solar cells, windmills, and wind-operated electricity generators, as well as ocean/tidal wave devices, will also benefit from the GST cut. The tax rate also applies to fuel cells for motor vehicles, including those powered by hydrogen. The GST on non-lithium batteries was reduced to 18% from 28%.

The landed costs for third-party solar open access projects increased in 11 of 15 states for high-tension industrial consumers, primarily driven by higher power purchase agreement tariffs, according to Mercom India’s Q2 2025 Solar Open Access Market Report. In Q2 2025, India added approximately 2.7 GW of solar open access capacity. This represented a quarter-over-quarter (QoQ) increase of more than 143% and a YoY rise of over 60%.

India imported solar cells and modules worth over $839.4 million (₹71.9 billion) in Q2 2025, an 8.3% YoY increase, according to data from the Department of Commerce. Solar cells made up 72.4% of the total import value, while modules contributed the remaining 27.6%. In a QoQ comparison, module and cell imports dropped by 35.6% from over $1 billion (~₹112.9 billion). While imports of solar cells rose 24.1%, imports of solar modules fell 71.5% in Q1 2025.

Maharashtra led solar open access installations in Q2 2025, accounting for 30% of the country’s capacity additions. Installations in the state rose 161% QoQ and 240% YoY, with nearly 59% of the projects delivered by three major developers. High grid tariffs drove several commercial and industrial consumers to opt for solar open access. The demand primarily came from consumers in sectors such as chemicals, fast-moving consumer goods, and textiles, which benefited from savings in electricity costs by switching to solar energy.

India added 44.2 GW of solar module capacity and 7.5 GW of solar cell capacity in 1H 2025, according to the recently released Mercom India research report, “State of Solar PV Manufacturing in India 1H 2025.” The manufacturing capacity additions in 1H 2025 were primarily driven by strong demand from the large-scale solar project pipeline of 186 GW between 2025 and 2027. Module manufacturing capacity also increased due to the 2030 solar installation targets and policy-driven domestic demand for solar modules compliant with the Approved List of Models and Manufacturers.

A delay of over 18 months in commissioning a transmission system strengthening program has created bottlenecks for evacuating 8.1 GW of power from a renewable energy zone in solar-rich Rajasthan. The Phase II (Parts E, G, and G1) transmission system strengthening project was scheduled to be completed in November 2023, but has remained uncommissioned, according to Grid-India’s ‘Operational Feedback on Transmission Constraints (April-June 2025)’ report. Several transmission project components, which were to be commissioned by November 2023 and September 2024, are yet to be completed.

Accelerating its push for creating domestic manufacturing capacities across the solar value chain, the government has proposed mandating the use of India-made wafers under ALMM starting June 1, 2028. The Ministry of New and Renewable Energy (MNRE), in a draft amendment to the ALMM order, proposes creating an ALMM List-III for wafers, on the lines of solar modules and cells. Stakeholders are invited to submit their comments and suggestions by October 11, 2025.

The Ministry of New and Renewable Energy issued the National Policy on Geothermal Energy to advance research, exploration, drilling techniques, reservoir management, and cost-effective power generation, along with wider adoption of direct-use technologies. Geothermal projects will receive the same support mechanisms as other renewable energy sources under the policy, including interstate grid access, interstate transmission system, and open access charge waivers, as well as must-run status, renewable purchase obligation eligibility, and participation in the Indian Carbon Credit Trading Program.

The Ministry of Power has notified the Electricity (Amendment) Rules, 2025, introducing changes in the regulatory framework governing the energy storage systems (ESS) usage. In June this year, the Ministry proposed the amendment to permit the sale, lease, and renting of ESS. The rules amend provisions of Rule 18 of the Electricity Rules, 2005, with a focus on broadening the scope of energy storage utilization and ownership. The revised sub-rule (2) states that an ESS can be used either as an independent storage facility or as part of generation, transmission, or distribution.

The Delhi Electricity Regulatory Commission petitioned the Supreme Court to allow it to liquidate its existing regulatory assets over seven years instead of four years, to mitigate the impact of tariff shock to consumers. The petition follows a Supreme Court direction to all states to clear the pending dues of ₹1.74 trillion (~$19.72 billion) owed to distribution companies within four years. It had also said new dues created after April 1, 2024, must be liquidated within three years.

The Ministry of New and Renewable Energy added a total of 4.8 GW of new solar cell capacity to the Approved List of Models and Manufacturers List-II, taking the total enlisted capacity to 17.88 GW. Tata Power Renewable Energy has secured approval for a facility with an enlisted capacity of 280 MW/year. The facility manufactures bifacial mono-crystalline PERC cells. The enlisted model achieves an average efficiency of 22.89% with a wattage of 7.54 W, offering a range of 20% to 23.5% efficiency, corresponding to 6.6W to 7.75 W. TP Solar, a Tata Power subsidiary, has received approvals for two entries at its facility.

The Tamil Nadu Electricity Regulatory Commission issued a comprehensive framework for renewable energy transactions through the Tamil Nadu Electricity Regulatory Commission’s Terms and Conditions for Green Energy Open Access Regulations, 2025. The notification outlines the terms for non-discriminatory access to green power using intra-state transmission and distribution networks. The regulations are designed to facilitate the purchase, sale, and banking of renewable energy by consumers, generators, and traders.

The Ministry of Power prescribed a renewable energy consumption obligation for designated consumers to achieve a 43.33% target by the financial year 2030. The regulation specifies a minimum share of renewable energy consumption for electricity distribution licensees, open access consumers, and captive users. The target of 43.33% RCO by FY 2030 comprises 3.48% from wind energy, 1.33% from hydro energy, 4.5% from distributed renewable energy, and 34.02% from other renewable energy sources.

The Directorate General of Trade Remedies (DGTR) imposed antidumping duties up to 30% on imports of solar cells, whether or not assembled into modules, originating in or exported from China for three years. The duty imposition follows the conclusion of the antidumping investigation initiated by DGTR in December 2024. The investigation was initiated following a joint application filed by FS India Solar Ventures, Jupiter International, Tata Power Solar, and TP Solar. The probe was conducted for the period between April 1, 2023, and March 31, 2024. The injury period was between 2020 and 2021.