Key facts
- India's solar capacity is projected to grow at a 22% CAGR from 2026 to 2035.
- Data centers and green hydrogen projects are key drivers of this solar expansion.
- Total power demand in India is expected to increase by 6% annually over the next decade.
- Solar's share of India's energy mix is forecast to rise from 28% in FY26 to 61% by FY35.
- India aims to reach 509 GW of solar capacity by FY35-36, up from 140 GW in early 2026.
India's solar capacity is poised for significant expansion, with projections indicating a 22% annual growth rate through 2035, according to a new report by Nuvama. This surge is primarily driven by the burgeoning demand from data centers and the development of green hydrogen projects, which are expected to substantially increase power consumption.
The report forecasts that India's overall power demand will climb by 6% each year over the next decade, fueled by economic expansion, urbanization, manufacturing growth, and increased electrification. Solar energy's growth is set to far outpace this overall demand increase.
Nuvama analysts estimate that data centers and green hydrogen capacity could add 251 GW of solar capacity under a base case scenario, and 406 GW in a bull case. Consequently, solar's share in India's installed generation capacity is expected to rise from 28% in fiscal year 2026 to 61% by fiscal year 2035, potentially reaching 65% in the bull case.
Earlier this year, India's Central Electricity Authority published a Generation Adequacy Plan projecting a near quadrupling of solar power capacity and a tripling of wind power assets within ten years. The country anticipates having 509 GW of solar power capacity installed by the end of fiscal year 2035-2036, a substantial increase from the 140 GW installed as of January 2026. This trajectory indicates a strong transition towards non-fossil energy sources, with renewables like solar, hydro, and wind, supported by energy storage systems, expected to dominate future capacity.
India had previously announced in 2025 that it had met its target of sourcing 50% of its installed electricity capacity from non-fossil fuel sources five years ahead of schedule. However, the pace of renewable energy installations is currently outpacing the expansion of the country's electricity grid. This imbalance is leading to a greater share of clean energy being curtailed, posing a potential risk to the continued boom in solar and wind power.