India on Track to Surpass 50GWdc of Solar Installations in 2026

Market Overview

India is on track to commission more solar capacity in 2026 than in any previous year, with full-year additions forecast to exceed 50GWdc, according to research from Wood Mackenzie. This would surpass the previous annual record of 49GWdc set in 2025.

India added 34GWdc of solar capacity in H1 2026, up 38% year on year, as developers accelerated project commissioning ahead of the June deadline for the Approved List of Models and Manufacturers-II (ALMM-II).

ALMM-II Drives Domestic Supply Chain Development

Under India’s ALMM framework, government-backed projects are required to source solar modules, cells and wafers from approved domestic manufacturers under ALMM List-I, List-II and List-III respectively.

The implementation of ALMM-II is accelerating the development of India’s domestic solar cell manufacturing capacity. However, cell production has not expanded as quickly as module manufacturing, creating a potential supply shortage.

Wood Mackenzie forecasts that utility-scale solar system prices could rise by around 20% by Q4 2026 as tighter cell availability increases project costs.

Strong H1 Growth Followed by Expected Slowdown

The strong installation growth in H1 2026 was largely driven by developers seeking to complete projects before ALMM-II took effect. The phased reduction of waivers on inter-state transmission charges also supported the accelerated build-out.

However, installation momentum is expected to slow in H2 2026 as cell shortages and higher module prices weigh on project economics.

Several ALMM-II exemptions could provide additional upside to the installation forecast, including waivers for certain net-metering and open-access projects through the end of 2026.

Rising Import Dependence

Although ALMM-II has reduced India’s direct dependence on Chinese solar cells, imports have increasingly shifted toward Southeast Asia. Indonesia, in particular, has become a growing source of solar cell imports.

During the first five months of 2026, India imported approximately 5GW of wafers and 20GW of cells, while wafer imports increased 86% year on year as manufacturers sought additional feedstock for domestic cell production.

India currently imposes a 20% basic customs duty on imported solar cells and modules. Additional anti-dumping measures against Chinese-origin products could further reshape sourcing strategies and increase the attractiveness of alternative supply chains.

Cell Capacity Expansion

India is rapidly expanding its domestic solar cell manufacturing base. Around 14GW of new cell capacity is currently under construction, while a further 130GW is expected to come online by 2029.

This expansion is aimed at closing the gap between India’s rapidly growing module manufacturing capacity and the cell supply required to meet ALMM-II requirements.

However, delays in bringing new capacity online could deepen import dependence and put further upward pressure on solar project costs.

Outlook

Solar system prices are expected to remain elevated through 2027 as new manufacturing capacity takes time to reach sufficient utilisation. Wood Mackenzie expects cell production to reach approximately 29GW in 2027, still below the estimated average annual module demand of 50GW.

Prices are expected to stabilise toward 2029 as additional domestic cell capacity comes online. The successful implementation of ALMM-II and the planned introduction of ALMM-III for solar wafers in June 2028 will be key to India’s long-term goal of building a fully integrated domestic solar supply chain.

Overall, India’s solar market remains on a strong growth trajectory, while the transition toward greater domestic manufacturing is likely to create both short-term cost pressures and long-term opportunities across the solar and energy storage value chain.