PRADHAN MANTRI SURYA SAROVAR YOJANA AND INDIA’S SOLAR EXPANSION

Why In News?

The government launched the Pradhan Mantri Surya Sarovar Yojana (PM-SSY) to construct 5,000 MW of floating solar projects on lakes and reservoirs. 

Status of Solar Energy Sector in India 

Global Leader: India is the 3rd largest country in renewable energy installed capacity and the 3rd largest in solar power capacity globally.  

Installed Capacity: India's cumulative solar power capacity has crossed 162 GW (June 2026), accounting for the largest share of the country's renewable energy capacity.

Non-Fossil Energy Transition: India has installed 283.46 GW of non-fossil fuel capacity, including 150.26 GW of solar capacity (March 2026), moving towards the 500 GW non-fossil capacity target by 2030. 

High Solar Potential: India has an estimated 748 GW solar potential, assuming utilisation of only 3% of wasteland.  

Rapid Capacity Expansion: Solar remains India's fastest-growing renewable source, driven by utility-scale parks, rooftop solar and PM Surya Ghar initiatives. 

• The International Energy Agency (IEA) projects that solar PV will account for nearly 80% of global renewable capacity additions during 2025–2030.

Policy Support: Government initiatives such as the National Solar Mission, PM Surya Ghar: Muft Bijli Yojana, PLI Scheme for Solar PV Modules, Solar Park Scheme, and PM-KUSUM are accelerating domestic manufacturing and deployment.  

Domestic Manufacturing: The PLI Scheme for High-Efficiency Solar PV Modules is strengthening indigenous manufacturing and reducing import dependence, supporting the goal of an Atmanirbhar solar value chain.  

International Leadership: India co-founded the International Solar Alliance (ISA) and promotes initiatives such as One Sun, One World, One Grid (OSOWOG) to enhance global solar cooperation.  

Emerging Challenge: Rapid solar expansion is now constrained by transmission bottlenecks and storage shortages, with about 7% of installed solar capacity unable to operate at full output during peak generation, highlighting the need for grid modernisation and energy storage.

Future Outlook: To support large-scale renewable integration, India has 47 GW of Battery Energy Storage Systems (BESS) and 23 GW of pumped storage projects under development. (Source: Ministry of Power.)

Challenges Facing India's Solar Energy Sector

Grid Integration & Storage: Rapid solar capacity addition has outpaced transmission infrastructure and battery storage, leading to renewable curtailment. 

• The Standing Committee on Energy (2025) noted that against 243 GW renewable capacity, India had only about 5.5 GW of storage, while 61 GW storage will be required by 2030.  

Transmission Bottlenecks: Inadequate transmission infrastructure has delayed evacuation of renewable power. The IEA (2025) estimates that about 60 GW of renewable capacity is constrained by transmission limitations.

Financial Stress of DISCOMs: Payment delays by DISCOMs reduce investor confidence. As of March 2025, DISCOM dues exceeded USD 9 billion. (Source: IEA)

Land Acquisition & Clearances: Utility-scale solar projects face delays due to land acquisition, environmental approvals and Right-of-Way issues. 

Import Dependence: India continues to depend on imports for solar cells, wafers and critical minerals, making the sector vulnerable to global supply-chain disruptions and price volatility. 

Limited Domestic Manufacturing: Despite PLI support, gaps remain across the solar manufacturing value chain, particularly in wafers and polysilicon. 

• The NITI Aayog Task Force on Solar & Wind Energy recommended correcting the inverted duty structure and strengthening domestic manufacturing.  

High Cost of Capital: Although among the lowest in emerging economies, India's financing cost for utility-scale renewables remains around 80% higher than advanced economies, affecting project viability. (Source: IEA)

Way Forward

Strengthen Grid & Storage: Accelerate Battery Energy Storage Systems (BESS), pumped-storage projects and Green Energy Corridors. 

Expand Transmission Infrastructure: Fast-track interstate transmission projects and renewable energy evacuation corridors, as recommended by the Central Electricity Authority (CEA).

Strengthen Domestic Manufacturing: Deepen the PLI Scheme, promote integrated manufacturing from polysilicon to modules and encourage R&D to reduce import dependence. 

Reform DISCOMs: Improve financial sustainability through timely payments, smart metering and implementation of power sector reforms to enhance investor confidence. 

Simplify Approvals: Establish single-window digital clearance systems for land acquisition, environmental approvals and transmission connectivity, as recommended by the Standing Committee on Energy (2025).

Promote Rooftop Solar: Expand PM Surya Ghar: Muft Bijli Yojana, improve concessional financing and incentivise DISCOM participation. 

• The Estimates Committee (2025) recommended enhanced financial support for decentralised solar projects under PM-KUSUM.

Boost Innovation & R&D: Invest in next-generation PV technologies, recycling of solar panels, green hydrogen integration and indigenous battery technologies through public-private partnerships. 

Enhance Investment Climate: Reduce financing costs through green bonds, blended finance and long-term concessional credit. The IEA (2025) identifies lower cost of capital as a key enabler for accelerating India's solar transition.  

Conclusion

India must combine its rapid solar expansion with powerful grid upgrades, massive battery storage, and strict waste recycling to secure position as a global green energy superpower.

Source: PIB