India installed 18 GW solar capacity in H1 2025, up 31% year-on-year, driven by surge in Q2, says Mercom
Utility-scale projects led installations, with Rajasthan, Gujarat, and Karnataka as the leading states
Module shortages, transmission bottlenecks, and policy uncertainties hindered potential growth despite an expanding large-scale project pipeline
Tender issuance and auctions dropped sharply, despite a 191 GW pipeline and 131 GW pending auctions
India installed 18 GW of solar capacity in the first half of 2025, representing a 31% year-over-year (YoY) increase, according to Mercom India Research. The surge in Q2 was fueled by 11.3 GW in new additions, as developers raced to meet ISTS waiver deadlines.
The Q2 additions were up 145.4% YoY, compared to around 5 GW in Q2 2024, and a 66.9% sequential improvement from the 6.7 GW installed in Q1 2025 (see India Installed 6.7 GW New Solar Capacity In Q1 2025).
The H1 2025 additions were led by utility-scale solar projects that increased by 20% YoY over 12.6 GW, which would come up to over 15 GW. Rajasthan, Gujarat, and Karnataka were the leading states with 29%, 18% and 13% of large-scale capacity, respectively.
Solar accounted for 24% of the country’s total installed power capacity, and more than 49% of the total installed renewable energy capacity at the end of June 2025, with a cumulative of 116.4 GW, according to the Mercom report. Large-scale solar accounted for nearly 86% and rooftop solar almost 14% of the country’s total installed power capacity.
However, India's solar installations could have been higher if developers faced fewer challenges in sourcing modules that met domestic content requirement (DCR) norms, according to Mercom India Managing Director Priya Sanjay. Especially as the Approved List of Models and Manufacturers (ALMM) List-II for solar cells comes into the picture, there will likely be a short-term supply shortage of modules.
“Developers continue to face shortages of DCR compliant modules transmission and substation bottlenecks and delays in power purchase agreement signings. At the same time, the market is transitioning towards storage, RTC and hybrid projects to address grid challenges and curtailment risks,” explained Mercom Capital Group CEO Raj Prabhu. “Without stronger domestic manufacturing output and balanced policy interventions, installations will remain under pressure and lag behind the expanding pipeline.”
The report writers claim that, pending certainty and detailed quarterly targets for implementing agencies, there was a 58.2% YoY decline in tender issuance for utility-scale solar, as it totaled 20.6 GW. India auctioned 8.1 GW during the period, a 74% drop from H1 2024.
At the end of June 2025, India’s large-scale solar project pipeline stood at nearly 191 GW, with another 131 GW of projects tendered and pending auction.
The complete report can be purchased from Mercom’s website.