India's 2030 RE Goal Faces Jeopardy: 42 GW Projects Stall Amidst No Buyers
Overview
India's ambitious 2030 renewable energy target is under serious threat, with 42 GW of auctioned projects languishing without offtake agreements. This significant hurdle jeopardizes future capacity additions, even as India prepares to become the world's second-largest solar market by 2026. Concerns over domestic manufacturing overcapacity also loom.
Stalled Projects Threaten 2030 Goals
India's target of achieving 500 GW of non-fossil fuel capacity by 2030 faces a substantial risk. BloombergNEF (BNEF) reports that a staggering 42 GW of renewable energy (RE) projects are stalled, awaiting firm offtake contracts after a record 60 GW of capacity was auctioned in 2024. This situation presents a significant downside risk, potentially leading to project cancellations and a shortfall in future capacity additions.
The nation is poised to overtake the United States as the world's second-largest solar power market in 2026, with solar capacity additions forecast to reach just over 50 gigawatts (GW) that year. Utility-scale projects are expected to drive this growth, supported by government subsidies for residential rooftop systems. India added a record 35 GW AC of solar capacity in the first 11 months of last year, putting it on track to meet its goals if current trends persist.
Domestic Manufacturing Focus and Overcapacity Fears
Policymakers are heavily focused on increasing the localization of the photovoltaic (PV) supply chain. Strict adherence to the Approved List of Models and Manufacturers (ALMM) effectively limits module usage to domestic factories, spurring significant investment in local manufacturing. Companies like Waaree Energies, Vikram Solar, and Premier Energies have recently listed, with more manufacturers eyeing public offerings to fund expansion. However, India's module manufacturing capacity now stands at approximately 125 GW annually, raising concerns about potential overcapacity and industry consolidation. Demand for upstream components used in module production still outstrips domestic supply, necessitating continued imports.
Global Market Shifts
Globally, solar installations are projected to decline for the first time this year, primarily due to China's slowdown. The U.S. market is expected to contract by 14% in 2026, falling to 44 gigawatts, largely due to new legislative hurdles like the One Big Beautiful Bill Act, which imposes restrictions on projects seeking tax credits. This decline allows India to ascend to the second position it has held since 2019. Despite these shifts, China will remain the world's largest solar market, with BNEF forecasting 321 GW of new additions in 2026, though this represents a 14% year-on-year decrease.
