INDIA SOLAR PV MODULE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

India Solar PV Module Market Size and Trends

India solar PV module market is estimated to be valued at USD 8.05 Bn in 2024 and is expected to reach USD 15.19 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 9.5% from 2024 to 2031.

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The government of India has set an ambitious target of producing 450GW of renewable energy by 2030, and this boosts investments in solar projects. Favorable net-metering policies and tax incentives for residential solar installations have boosted demand from the rooftop solar segment. Low module prices and continuous technological advancements makes solar energy more accessible and cost-effective as compared to traditional energy sources. The interest of major global module manufacturers to increase production capacity in India can drive the market growth

Market Driver - Government supportive policies and initiatives

Indian government focuses on accelerating the development of renewable energy sources. With growing concerns around energy security and environmental degradation caused by excessive dependence on fossil fuels, the leadership recognizes solar as a vital avenue to address the twin challenges of ensuring adequate power availability as well as reducing carbon footprint. Favorable policies and programs rolled out in the last few years have incentivized investments and enhanced uptake of solar power technologies.

Jawaharlal Nehru National Solar Mission was launched in 2010 with an ambitious goal of deploying 20 GW of grid-connected solar power by 2022. This provided the much-needed impetus to solar entrepreneurs and manufacturers to gear up and participate in this new sunrise sector. The target has been achieved well ahead of schedule and stands revised to 100 GW. Introduction of auctions or competitive bidding for large utility-scale projects can also drive the market growth. The e-reverse auction mechanism has significantly lowered the prices at which projects are awarded to developers, making solar energy more cost-competitive against conventional sources. Multiple states have followed this model to meet their renewable purchase obligations at economical tariffs.

The government is promoting rooftop solar schemes to encourage installations at the residential and commercial levels. Capital subsidies under the MNRE's rooftop program have stimulated small-scale adoption. Recently introduced provisions like net-metering further strengthen the business case for households and industrial/commercial establishments to install solar PV systems. Favorable policies such as accelerated depreciation, generation-based incentives, and tax exemptions increases the appeal of localization, and indigenous manufacturing of solar panels, and related components. The production linked incentive scheme is aimed at boosting domestic production capabilities.

The government's firm policy resolves and follow up actions have generated a thriving market ecosystem for solar PV modules and related products. Both the large-scale utility segments as well as the decentralized rooftop market segments witness high growth rates. The policy environment is conducive for sustained capacity expansions by developers and technology providers due to medium to long term government targets. Supportive policies and programs at central and state levels can drive the India solar PV module market growth.

Falling module prices

Pronounced downward trend in solar module prices worldwide has played a seminal role in shaping India's solar PV module market. Continuing technology innovation coupled with rapidly increasing manufacturing capacities have led to significant reductions in production costs for solar panels over the past decade. Lower costs have translated to cheaper per unit costs for solar power generation, enhancing the competitive positioning of solar energy against traditional energy sources. This price decline phenomenon enables larger scale adoption across India.

The module price decline curve tells a remarkable story - from over US$ 4/Watt in 2010, international benchmark prices have now fallen below US$ 0.4/Watt according to industry reports. This represents a staggering ten-fold decrease in a span of just 10 years that has made solar power increasingly competitive on an unsubsidized basis in several market scenarios. Indian module manufacturers and project developers have also directly benefitted from these reductions in sourcing of equipment. Reduced capital expenditures for projects have supported lower project commissioning costs and tariffs discoverable through competitive bidding.

Large utility scale installations as well as decentralized rooftop segments find stronger commercial viability even after accounting for balance of system costs. The payback periods have progressively shortened, strengthening the financial case for investments. This has allowed for more aggressive targets to be set for capacity additions as the resource can now deliver power at tariffs on par or even below prevailing power pool prices from the grid.