India added an estimated 40 GW of solar capacity in calendar year 2025, driven by utility-scale projects and rooftop growth. Energy storage tendering also picked up pace.
January 9, 2026
Uma Gupta
From pv magazine India
India added a “record” 40 GW of new solar power generation capacity in calendar year 2025, according to a new report by SBICAPS, supported by steady utility-scale execution and a sharp acceleration in rooftop installations under the PM Surya Ghar Muft Bijli Yojana.
Despite the capacity growth, the report said the average capacity utilization factor of solar plants declined to about 16.5% in the first 11 months of calendar year 2025, down from 19.2% in calendar year 2022.
Overcast conditions and an extended monsoon reduced irradiation, while lower daytime demand led to curtailment during peak generation hours, particularly in resource-rich western states. Additional renewable capacity remains stalled due to land acquisition challenges, unsigned power purchase agreements, equipment transport difficulties, and delays in transmission clearances.
Transmission infrastructure additions continue to lag renewable capacity growth, creating bottlenecks for grid integration. Less than 50% of the targeted transmission capacity for the first eight months of fiscal year 2026 has been completed, the report said.
Land acquisition under complex valuation regimes has created right-of-way issues, while shortages of critical equipment, including transformers, have slowed execution. High-voltage direct current projects have been particularly affected due to reliance on highly customized equipment. The situation has been further complicated by requirements for underground transmission lines.
Energy storage tendering accelerated in calendar year 2025 and is broadly aligned with projected requirements, although very little battery energy storage system capacity is operational so far. After a period of stability, tariffs for standalone battery storage projects have resumed a downward trend, raising concerns over long-term project viability. The report attributed part of the decline to falling battery costs, with lithium-ion battery pack prices down about 8% year on year.
Around 27 GWh of energy storage capacity remains without tariff approval, the report said. About 22% of storage capacity tendered since calendar year 2018 has been canceled, although no cancellations were recorded in calendar year 2025.
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