In Short : India’s solar industry has grown at an unprecedented rate, and it can now produce nearly 100 GW of solar panels. The industry is getting ready for a new stage of expansion, propelled by government initiatives like the Approved List of Models and Manufacturers (ALMM) and the Production Linked Incentive (PLI) program. But according to a recent report by SBI Capital Markets (SBICAPS), unless exports increase or domestic demand picks up speed, India might be facing a severe oversupply problem by 2027.
Market Trends and Forecasts
It is anticipated that India will install 40–50 GW of solar power annually, bringing the country’s total solar power capacity close to 190 GW. This lessens reliance on non-renewable resources and supports the nation’s shift to renewable resources, but it also increases the possibility of module oversupply.
Due to international trade restrictions, module exports, which were previously around 10 GW, decreased to just 4 GW in FY25. Industry analysts warn that India may have far more solar panels than it needs right now by 2027 due to a decline in foreign buyers and a sharp rise in domestic capacity.
Bottlenecks in strategy
There are still gaps in the solar value chain despite significant advancements. India is dependent on imports because its solar cell production capacity is still less than 30 GW. Although domestic cell usage is required for some projects under ALMM-II (effective August 2025), developers may experience a short-term increase in costs.
Wafer and polysilicon production is lagging further upstream. Polysilicon is still mostly dependent on imports, and wafer plants experience delays. This might make it more difficult for India to produce solar systems on its own in the near future.
The Importance
This moment represents a critical turning point for India’s clean energy sector:
The country is firmly shifting towards sustainable development.
Carbon emissions are decreased when solar systems are installed on a large scale.
Declining solar prices may hasten industry and household adoption.
The difficulty, however, is in striking a balance between profitability and growth—making sure that production doesn’t surpass real demand.
The Bottom Line
Although India’s success in producing solar panels is a global accomplishment, SBI Capital cautions that there could be an oversupply by 2027. To protect the industry, India needs to:
Increase domestic demand by installing solar light and rooftop solar systems.
Extend export markets outside of the United States.
Invest in supply chains that are upstream, such as polysilicon and wafers.
Continue to be competitive to guarantee long-term growth.
With proper management, this boom could put India at the vanguard of the global revolution in renewable resources, guaranteeing economic opportunity and energy security while lowering reliance on non-renewable resources.
