India Unveils Comprehensive Policy Push to Accelerate Solar Power Growth Nationwide

New Delhi, India – In a landmark move to secure its energy future and meet climate pledges, the Government of India has rolled out a sweeping policy package aimed at accelerating solar power generation across the country. The new measures are designed to strengthen domestic manufacturing, expand rooftop solar adoption, streamline regulations, and ensure long‐term financial stability for both large‐scale and distributed solar projects.

At the heart of the policy is a strong emphasis on bolstering the solar supply chain within India. Recent government data shows solar cell manufacturing capacity jumped from 9 GW in March 2024 to 25 GW by March 2025, and module manufacturing capacity almost doubled from 38 GW to 74 GW over the same period. Also, India inaugurated its first ingot‐wafer manufacturing facility (2 GW), further fortifying the upstream portion of the value chain. These gains come amid tighter import restrictions and incentives intended to favour domestic producers.

Another center‐piece of the policy is a suite of schemes to bring solar power closer to citizens. Under the “PM Surya Ghar: Muft Bijli Yojana,” the government plans to install rooftop solar panels for 1 crore households and guarantee up to 300 free electricity units monthly for those households. Subsidies range by system size, offering ₹30,000 for 1 kW systems, ₹60,000 for 2 kW, ₹78,000 or more for 3 kW or larger systems, while even if users take loans, significant savings on electricity are expected in subsequent years.

The policy also reaffirms and expands other existing solar initiatives: solar parks, the PM-KUSUM scheme for farmers, canal‐top/canal‐bank solar installations, and repowering of idle solar capacity. Importantly, many of these projects will now be mandated to use locally produced panels and cells. The government has also extended the waiver of Inter‐State Transmission System (ISTS) charges for inter‐state sale of solar and wind power for projects that are commissioned by a fixed deadline (June 2025), in order to ease cost burdens.

Regulatory reforms are a core component. The policy clarifies and strengthens the Renewable Purchase Obligation (RPO) trajectory through 2029-30, creates clearer standards for solar device and system performance, formalises green energy open access rules, and ensures timely payments to solar power producers—issuing orders for payments to be backed by Letters of Credit or advance payment mechanisms.

The policy also tackles finance and investment hurdles. To attract both domestic and foreign investment, 100% Foreign Direct Investment (FDI) is permitted through the automatic route in solar energy generation, manufacturing, and associated infrastructure. Furthermore, to support viability, the government is expanding financial incentives, including viability gap funding (VGF) for solar parks and projects that otherwise struggle to meet financial benchmarks.

Experts welcome the policy as a critical turning point. “This package brings together manufacturing, finance, regulatory clarity and demand‐side incentives in a way India has needed for some time,” says a renewable energy analyst. “If implemented well, it could accelerate India’s progress toward 500 GW of non‐fossil energy capacity by 2030, reduce dependency on imported solar components, and help in achieving net‐zero goals by 2070.”

However, challenges remain. Adequate grid infrastructure and storage capacity need scaling up to manage solar intermittency. Also, while domestic manufacturing is increasing, cost competitiveness and supply chain resilience will need sustained support. Ensuring that smaller states, rural areas, and low‐income households are included will be essential for equity in energy access.

Outlook: With implementation now underway, India’s solar industry is poised for rapid growth. Rooftop solar, large solar parks, canal‐top installations, and solar for agriculture together create a diversified growth front. If policy targets are met, India stands not only to meet its climate commitments under the Paris Agreement but also to become a leading global hub for solar innovation and manufacturing.