The global energy landscape is undergoing a revolutionary shift, and at its heart is the majestic, relentless power of the sun. Once a fringe technology, solar power is now a strategic asset, and nations are pouring fortunes into harnessing it. India, a country bathed in abundant sunshine for over 300 days a year, is not just participating in this race, it is rapidly becoming one of its defining contenders.
The global solar race
China remains the undisputed world champion, having built a phenomenal capacity of over 890 GW. China’s dominance stems from its strategic, state-backed investment in manufacturing the entire solar supply chain, driving down costs globally. Following this colossal lead are nations like the United States (around 236 GW), whose growth has been heavily turbo-charged by policy frameworks like the Inflation Reduction Act, and Japan and Germany (both over 100 GW), which have focused heavily on technological innovation and distributed rooftop generation, respectively. According to recent data, India has firmly cemented its place as the third-largest solar power producer globally, surpassing Japan in annual generation and achieving an installed capacity of approximately 119 GW.
Why India's investment is distinct
While India’s overall investment figures are huge, attracting billions in foreign capital, they remain below the outright spending of China and the US due to distinct economic and political hurdles. The journey has been difficult, marked by land acquisition complexities for massive solar parks and heavy reliance on imported solar components, largely from China which impacts the speed and cost of domestic projects.
However, India’s investment approach is unique: it is driven by a non-negotiable need for energy security and a commitment to lift millions out of energy poverty. This is why the investment has been channelled into world-beating mega-projects, such as the Bhadla Solar Park in Rajasthan (once the world’s largest single location solar park at over 2,245 MW) and the sprawling Pavagada Solar Park in Karnataka. Even symbolically, India is pioneering, with the Cochin International Airport in Kerala becoming the world’s first to be entirely powered by solar energy, demonstrating utility in high-traffic commercial hubs.
Increased investment will bring three profound benefits. Firstly, it will dramatically bolster energy security, reducing India’s vulnerability to volatile global oil and gas markets, thus saving billions in foreign exchange. Secondly, it is a formidable engine for job creation, generating employment across manufacturing, installation, and maintenance, especially in rural areas. Finally, achieving the ambitious target of 500 GW of non-fossil fuel capacity by 2030 will solidify India's global leadership in climate action, safeguarding its burgeoning economy.
Structural bottlenecks and economic impact
Talking with Asian Voice, Jyoti Roy, Founder & CEO of GreenEnco, provides an assessment of the challenges and opportunities facing India's solar sector. India’s ambition to achieve 500 GW of renewable energy capacity by 2030 is within reach, but unlocking that potential demands urgent reforms to overcome deep-rooted structural and regulatory bottlenecks.
While the country has made tremendous progress in scaling up solar installations, challenges in policy execution, grid readiness, and investment confidence continue to slow momentum.
Key bottlenecks include Land Acquisition, where fragmented ownership, complex records, and multi- departmental approvals often delay project development. Streamlining these through state-level renewable land banks and GIS-based mapping systems can fast-track large-scale project deployment. Grid Connectivity is another major issue, as India’s generation capacity is outpacing its transmission infrastructure, leading to curtailment and stranded assets.
The Financial Stress of DISCOMs is also critical, as cash-strapped state utilities delay payments and renegotiate tariffs, dampening investor confidence. A centralised payment security mechanism and performance-linked incentives for DISCOMs would help stabilise cash flows. Furthermore, Policy Uncertainty, with frequent tender changes, shifting ALMM norms, and state-level inconsistencies, increases risk premiums. Finally, Curtailment Without Compensation undermines project bankability; a "must-run" compensation policy and transparent curtailment reporting dashboards can enhance investor trust.
From an economic perspective, enhanced investment in solar power can deliver transformative economic benefits for India over the next decade. The sector is emerging as a driver of GDP growth, employment, and national energy security. Solar deployment is highly capital-intensive and labour-rich, creating thousands of jobs in manufacturing, engineering & construction, and digital operations.
The Atmanirbhar Bharat programme, strengthening domestic manufacturing for modules, inverters, and batteries, would retain greater value within the Indian economy while reducing dependence on fossil-fuel and equipment imports, improving the current account and stabilising the rupee. Solar and storage integration also enhance industrial competitiveness by reducing electricity costs, enabling green manufacturing, and supporting the emerging hydrogen economy. Economically, large-scale solar investment contributes directly to GDP through new capital formation and indirectly by powering industries more efficiently. To gauge its true impact, India should monitor metrics such as clean-energy investment flows, investment confidence index, domestic actual manufacturing capacity (rather than name place capacity), and jobs created per MWH energy generation (rather than MW installed).
