India installed 15.3 GW of new solar PV capacity in Q1 2026, its strongest quarter on record, says Mercom India Research
Utility-scale projects accounted for more than 82% of new additions, led by Gujarat and Rajasthan, while distributed solar also expanded under PM-KUSUM
Tendering and auction activity during the quarter declined sharply as developers remained cautious over ALMM compliance, rising land costs, and transmission constraints
India got off to a good start in 2026, installing 15.3 GW of new solar PV capacity in the first quarter of the calendar year. Installations in its ‘strongest quarter ever’ rose by more than 143% year-on-year (YoY) from 6.3 GW in Q1 2025, according to Mercom India Research.
This expanded the country’s cumulative installed solar PV capacity to exceed 152 GW as of March 31, 2026, with solar accounting for 28% of India’s total installed power capacity.
Mercom previously pegged India’s Q1 2025 solar PV installations at 6.7 GW, representing a 25% YoY drop (see India Installed 6.7 GW New Solar Capacity In Q1 2025). On a quarterly basis, Q1 2026 installations rose nearly 49% from 10.3 GW installed in Q4 2025, adds Mercom.
At 12.6 GW, large-scale solar increased by 55% quarter-on-quarter (QoQ) and 147% YoY to account for over 82% of the installations, with open access projects contributing 21% of the large-scale projects. Gujarat and Rajasthan were the leading states in this category, followed by Maharashtra.
Distributed generation also accelerated, especially under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM).
Analysts attribute the record growth to the rush to meet policy deadlines, especially the Approved List of Models and Manufacturers (ALMM) List-II for solar cells, along with a reduction in Inter-State Transmission System (ISTS) charge-waiver benefits, and improved transmission in some states.
Mercom India’s Managing Director, Priya Sanjay, said that while the market is operating under the assumption that the ALMM List-II deadline may not be extended, project developers and module manufacturers may push for some relief, such as a short extension on a project-by-project basis.
Tender activity continues to struggle, with the country awarding about 3 GW during Q1, down 68% YoY but up from the previous quarter. Auctions of about 4 GW of solar projects were down by 47% QoQ and 64% YoY.
Sanjay explains that developers are cautious about bidding, given uncertainty about which ALMM compliance conditions will apply as projects move forward. Additionally, land prices are increasing as farmers become more aware of solar development amid a lack of contiguous land parcels.
Mercom Capital Group CEO Raj Prabhu believes transmission bottlenecks could play spoiler in what he considers likely to be a record year for solar installations.
“While project execution and commissioning activity remains strong, transmission readiness and evacuation infrastructure are struggling to keep pace with the rapid growth in renewable capacity,” added Prabhu. “As renewable penetration increases, curtailed. Grid flexibility and storage integration are becoming critical to sustaining future growth.”
The complete report titled Q1 2026 India Solar Market Update Report can be purchased from Mercom’s website.
Earlier in an exclusive interview with TaiyangNews, National Solar Energy Federation of India (NSEFI) CEO Subrahmanyam Pulipaka forecast India to become the world’s second-largest solar PV market in FY2026 with installations approaching 50 GW AC (see NSEFI Exclusive: India Will Be World’s 2nd-Largest Solar Market In 2026).