Unleashing India's Solar Power Potential

• 27 Mar 2025

This editorial is based on “Mandating storage for rooftop solar may backfire without clarity” which was published in Business Standard on 26/03/2025. The article brings into picture the rapid growth of India’s solar sector, with 5.21 GW rooftop solar added in a year, while highlighting challenges in grid stability, storage, and financial viability.

For Prelims: India's solar sector,  PM Surya Ghar Muft Bijli Yojana, Rooftop solar,  Production Linked Incentive (PLI) scheme, India’s Atma Nirbhar Bharat vision,  International Solar Alliance, Central Electricity Authority , Ramagundam Floating Solar Plant.  

For Mains: India's Current Advancements in the Solar Energy Sector, Key Issues Related to India's Solar Sector.

India's solar sector is experiencing rapid growth, with 5.21 GW of rooftop solar added in just one year through the PM Surya Ghar Muft Bijli Yojana. However, the sector faces critical challenges in grid stability, storage integration, and financial viability. Technical hurdles with hybrid inverters and battery storage, coupled with complex electricity pricing structures, threaten to slow down solar adoption. The path forward requires innovative policy frameworks that address technical standards, financial feasibility, and grid support mechanisms. 

What are India's Current Advancements in the Solar Energy Sector?  

• Surge in Solar Capacity and Global Positioning: India has emerged as a global solar leader, ranking 4th worldwide in solar power capacity.  
  • The country has rapidly expanded its solar base, aligning with its energy transition goals.  It is a vital part of India’s pledge to reach 500 GW of non-fossil fuel capacity by 2030. 
  • Solar capacity rose from 21.6 GW in 2018 to 70.10 GW as of June 2023. India aims for 280 GW of solar capacity by 2030, forming the backbone of its 500 GW renewable goal. 
• Rooftop Solar Revolution: The launch of PM Surya Ghar: Muft Bijli Yojana in 2024 has catalyzed residential solar adoption, targeting middle- and lower-income households.  
  • By subsidising installations, it addresses affordability and boosts energy self-reliance at the household level. This decentralized push improves energy access while reducing grid load and emissions. 
  •  ₹75,021 crore allocated to install rooftop solar on 1 crore homes. Households can receive up to 300 units free/month and earn ₹17,000–18,000/year from surplus power sales. 
• PLI Scheme Boosting Domestic Solar Manufacturing: India is reducing import dependency through the Production Linked Incentive (PLI) scheme, fostering large-scale manufacturing of high-efficiency solar PV modules.  
  • This initiative supports India’s Atma Nirbhar Bharat vision and strengthens the solar supply chain. It has also spurred job creation and long-term investment in the clean energy sector. 
  • ₹24,000 crore PLI outlay, supporting 47 GW+ of module manufacturing. Tranche-II alone attracted ₹93,041 crore investment, generating more than 1 lakh jobs. 
• Solar Parks Scaling Utility-Scale Capacity: India is expanding its solar parks to achieve grid-scale deployment through economies of scale and efficient land use.  
  • These parks serve as hubs for mega solar projects, attracting investment and facilitating quick capacity addition. They also reduce project risk by ensuring pre-developed infrastructure. 
  • 50 solar parks with 38 GW capacity targeted by 2025–26. 10,237 MW capacity already commissioned across 11 completed parks. 
• Innovation in Technology – Floating Solar and Smart Panels: India is adopting advanced technologies such as floating solar, bifacial modules, and smart inverters to increase efficiency and diversify deployment locations.  
  • Floating solar reduces land burden while smart tech enhances grid integration. These innovations are key to overcoming spatial and technical constraints. 
  • For instance, the 100 MW Ramagundam Floating Solar Plant (Telangana) is one of India’s largest. 
    • Adoption of bifacial panels and hybrid inverters is accelerating in large projects and pilot rooftops. 
• Global Leadership and Diplomacy through International Solar Alliance (ISA): India’s leadership in launching the International Solar Alliance (ISA) reflects its strategic role in global energy transition.  
  • ISA promotes solar deployment in developing countries, especially in Africa, supporting India’s diplomatic and climate leadership goals. It also helps attract international finance and innovation partnerships. 
  • 111 countries joined ISA, aiming for 450 GW RE by 2030. SolarX Challenge – Africa Chapter promotes scalable, affordable solar innovations. 

What are the Key Issues Related to India's Solar Sector? 

• High Cost and Limited Viability of Storage Integration: With growing solar capacity, ensuring round-the-clock power supply through storage is becoming critical. 
  • However, battery storage remains expensive, especially for residential users under net metering, making hybrid RTS systems financially unviable. 
    • A mandatory storage requirement, as recently advised by the Ministry of Power, may slow rooftop adoption instead of accelerating it. 
  • For instance, a 1 kWp RTS system costs ₹65,000–75,000, but adding 2-hour storage nearly doubles the cost. 
    • Payback periods double with storage; in some states, it becomes financially unviable. 
• Grid Stability and Over-Generation Challenges: As solar penetration increases, especially in peak sunlight hours, distribution networks are facing issues of localised over-injection and voltage instability.  
  • Without real-time visibility and control systems, Discoms are struggling to absorb decentralized solar efficiently. This may lead to curtailment and discourage solar investment. 
    • For instance, despite five bailouts, DISCOMs (distribution companies accumulated losses reached approximately  ₹6.77 lakh crores (€74.4 billion) by 2022- 2023. Solar inefficiency will further exacerbate this.  
  • The Central Electricity Authority advisory urges 2-hour storage to mitigate over-injection and ensure grid reliability, but implementation remains sluggish.  
• Policy Uncertainty and Frequent Regulatory Changes: Frequent shifts in net metering regulations, state-level tariff rules, and uncertainty around subsidy disbursement have created instability in the sector.  
  • Investors and consumers hesitate due to policy unpredictability and delayed payments from Discoms. This affects both project viability and sectoral confidence. 
  • Several states (e.g., Maharashtra, Gujarat) revised net metering caps within a year. Late Payment Surcharge Rules 2022 were introduced to address Discom delays, still persistent. 
• Domestic Manufacturing Constraints and Import Dependence: Despite PLI incentives, India's solar manufacturing ecosystem is still nascent, especially in upstream segments like polysilicon and wafers.  
  • Heavy dependence on Chinese imports for key components poses a supply chain risk and undermines Atmanirbhar Bharat goals. 
  • China remains India's top supplier of solar cells and modules, providing $3.89 billion worth of imports (62.6%).  
    • To reduce dependency on Chinese imports, India imposed a 40% customs duty on solar modules and a 25% duty on solar cells, but full self-reliance in the value chain is still distant. 
• Technical Gaps in Hybrid Systems and Lack of Standards: The integration of battery storage with rooftop solar requires efficient hybrid inverters and system communication, which remains fragmented.  
  • The absence of uniform BIS standards for hybrid inverters has led to market inconsistency and performance inefficiencies, especially in high-capacity systems. 
  • Most inverters operate below 60V, causing thermal losses and lower efficiency in >3kW systems. No unified standard yet exists for hybrid inverters' voltage or communication protocols. 
• Land and Transmission Infrastructure Constraints: Utility-scale solar projects require vast land and robust transmission networks, both of which face constraints.  
  • Land acquisition delays and lack of last-mile transmission access stall project commissioning and increase costs.  
    • Solar parks in some states remain under-utilized due to evacuation bottlenecks. 
  • And due to this, utility-scale solar projects are experiencing an average delay of 17 months from their scheduled completion date, with extreme cases seeing delays of up to 34 months.  
    • Inter-State Transmission System (ISTS) charges are waived till June 2025, but infrastructure gaps persist in several solar-rich states. 
• Ecological Disruption and Impact on Biodiversity: Large-scale solar installations, especially in arid and semi-arid ecosystems, often lead to habitat fragmentation and biodiversity loss.  
  • While some studies show that solar farms can be managed to enhance pollinator habitats and even support bee populations. 
    • But clearing land for solar parks disrupts native flora and fauna, affecting ecological balance. Pollinators like honeybees, critical to agriculture and biodiversity, are particularly impacted by heat islands and vegetation loss. 
  • This affects 75% of India’s food crops that rely on insect pollination, risking agricultural productivity. 

What Strategic Measures can India Implement to Strengthen its Solar Sector? 

• Time-of-Day (ToD) Tariffs and Grid-Linked Storage Incentives: India should adopt dynamic pricing through Time-of-Day tariffs to incentivise storage-linked solar adoption and shift consumption to periods of solar surplus.  
  • Coupling this with performance-linked incentives for grid-interactive battery systems can ease pressure during evening peaks.  
  • This would also support grid balancing and smoothen intermittency challenges. 
• Hybrid Solar Systems and Mandate Smart Inverters: Establishing national BIS standards for hybrid inverters, battery voltage ranges, and communication protocols is essential for interoperability and efficiency.  
  • Simultaneously, mandating smart inverters in all new rooftop solar systems can enhance grid visibility, enable real-time reactive power control, and strengthen last-mile grid management. 
• Integrate PM-KUSUM with Rooftop Solar (RTS) Schemes: Converging PM-KUSUM with the PM Surya Ghar Muft Bijli Yojana can amplify decentralised solar penetration across rural and semi-urban India.  
  • By combining agricultural solar pump solarisation with household RTS infrastructure, states can create solar villages with self-sufficient microgrids, enhancing both energy security and rural livelihoods. 
• National Solar Ecosystem Platform for Financing and Services: A one-stop digital portal for RTS applications, subsidies, bank loan integration, vendor accreditation, and O&M services will streamline adoption.  
  • Integrating UPI, Aadhaar-based verification, and standardised loan schemes through public-sector banks can help especially in semi-urban and rural areas where uptake is slower. 
• Strengthen Domestic Manufacturing Beyond Modules: While PLI schemes have boosted module production, upstream segments like polysilicon, ingots, and wafers must be prioritised to create full solar supply chain resilience.  
  • Dedicated clusters, technology-transfer tie-ups, and long-term procurement contracts from SECI can support vertical integration and reduce import dependency. 
• Utilise Wastelands and Canal Tops for Solar: Government should promote solar deployment on wastelands, canal tops, and industrial rooftops using designs that minimise ecological impact.  
  • Solar projects must adopt biodiversity-sensitive layouts like elevated structures, pollinator-friendly vegetation, and no-fencing zones in sensitive areas to protect ecosystems while enhancing land-use efficiency. 
• Institutionalise Net-Zero Targets at Urban Local Body Level: Empowering Urban Local Bodies (ULBs) and panchayats with budgeted net-zero targets and linking them to performance grants can drive grassroots solar adoption.  
  • Solar mandates in municipal buildings, street lighting, and water pumping infrastructure will mainstream renewables in urban governance and service delivery. 

Conclusion:  

India’s solar sector has made remarkable progress, but overcoming challenges in grid stability, storage, and policy consistency is crucial for sustained growth. Strengthening domestic manufacturing, promoting hybrid systems, and integrating solar with innovative financing models will accelerate adoption. A strategic focus on smart regulations, decentralized deployment, and ecological sustainability will enhance resilience.  

Drishti Mains Question:

Solar energy is often regarded as a key pillar of sustainable development. Discuss its significance for India, along with the challenges and opportunities in scaling up solar power in the country.

UPSC Civil Services Examination Previous Year Question (PYQ)  

Prelims

Q. Consider the following statements: (2016)

1. The International Solar Alliance was launched at the United Nations Climate Change Conference in 2015.  
2. The Alliance includes all the member countries of the United Nations.  

Which of the statements given above is/are correct?  

(a) 1 only   

(b) 2 only  

(c) Both 1 and 2  

(d) Neither 1 nor 2  

Ans: (a)

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Mains

Q. India has immense potential for solar energy though there are regional variations in its developments. Elaborate. (2020)