New Delhi: The Union Ministry of New and Renewable Energy (MNRE) has released a statement addressing concerns regarding the financing of renewable energy (RE) projects, particularly in the solar sector. The MNRE clarified that it has not instructed lenders to halt funding for these projects amidst worries about excess domestic solar manufacturing capacity.
Instead, the ministry stated that it has shared the current status of domestic solar manufacturing capabilities with the Department of Financial Services and prominent RE lenders, including the Power Finance Corporation, REC, and the Indian Renewable Energy Development Agency. The intention behind this information sharing is to enable these institutions to adopt a "calibrated, well-informed" approach when evaluating investments across the solar value chain.
The ministry's communication follows concerns raised by the All India Solar Industries Association (AISIA) in August 2025, which warned that module manufacturing capacity has grown to nearly four times annual demand, and that unchecked lending could create unsustainable debt burdens and potential non-performing assets (NPAs) in the banking system. AISIA urged that banks increase due diligence before funding additional module or cell projects.
MNRE emphasized that financing should not be limited to module manufacturing but should also extend to upstream segments such as cells, ingots, wafers, and polysilicon, as well as ancillaries like solar glass and aluminum frames. While module capacity is oversupplied, the ministry noted an uneven picture across the value chain. India currently has about 27 GW of solar cell manufacturing capacity – slightly below present demand – but this too is projected to exceed 100 GW within next few years surpassing domestic needs as new projects come online. In sharp contrast, upstream segments such as polysilicon, ingots and wafers remain severely underdeveloped, with only about 2 GW of ingot and wafer capacity and no commercial polysilicon production in the country, the ministry highlighted.
The government has reiterated its commitment to making India self-reliant in solar photovoltaic (PV) manufacturing and strengthening its position in the global value chain. India's module manufacturing capacity has increased significantly, from 2.3 GW in 2014 to 122 GW listed on the Approved List of Models and Manufacturers (ALMM), supported by schemes such as the Production Linked Incentive (PLI) for high-efficiency modules. India's installed solar module manufacturing capacity has reached nearly 150 GW. This volume is 200–250 percent higher than the current domestic requirement, with total capacity expected to cross 200 GW in the coming years.
Union Minister of New and Renewable Energy Pralhad Joshi said that India has recorded its highest-ever addition of non-fossil capacity in the current financial year at 31.25 GW, including 24.28 GW of solar. In the last 11 years, the country's solar capacity has grown from 2.8 GW to around 130 GW, a rise of more than 4,500%. Between 2022 and 2024 alone, India contributed 46 GW to global solar additions, becoming the third-largest contributor.
The ministry affirmed that it would continue providing policy support, infrastructure development, and stakeholder engagement to ensure India's solar sector remains "inclusive, competitive, and future-ready". MNRE is the nodal agency at the central level for promoting grid-connected and off-grid renewable energy in the country. The ministry's programs are implemented in close coordination with State Nodal Agencies (SNAs) for renewable energy (RE).
India has already achieved 50% of its installed electricity capacity from non-fossil fuel sources, ahead of its Nationally Determined Contributions under the Paris Agreement. As of October 31, the country's non-fossil fuel capacity stands at 259 GW, with 31.2 GW added in the current financial year. India is steadily balancing coal with renewable energy as part of the transition process.
