India is on track to surpass its solar installation record in 2026, driven by regulatory deadlines that are tightening supply chains and elevating costs, with ambitions for domestic manufacturing growth facing significant challenges.
India is on course for a record year in solar power additions in 2026, but the rush to meet a new domestic-content rule is also tightening supply and pushing up prices. Wood Mackenzie said the country added 34 gigawatts DC of solar capacity in the first half of 2026, 38% more than a year earlier, as developers hurried to finish projects before the June deadline for the Approved List of Models and Manufacturers-II, or ALMM-II, which requires government-backed schemes to use modules made from locally manufactured cells.
The consultancy now expects full-year installations to top 50 GW DC, which would edge past the 49 GW DC record set in 2025. That momentum builds on an already strong start to the year: pv magazine India reported in May that the country added a record 15.3 GW in the first quarter alone, while another report in April said India installed about 44.6 GW in fiscal 2026, lifting total renewable capacity to 275 GW by March 31.
But the policy that has accelerated deployment is also exposing a manufacturing gap. EarthEnergyLog said that by May 2026 India had about 194 GW of ALMM-listed module capacity but only about 30 GW of listed cell capacity, underscoring how much faster module production has grown than cell output. Wood Mackenzie said that imbalance has shifted imports rather than eliminated them, with demand moving away from China and towards south-east Asia, including a sharp rise in cell shipments from Indonesia. The firm also said India imported 5 GW of wafers and 20 GW of cells in the first five months of 2026, while wafer imports rose 86% year on year to support domestic cell production.
That shortage is expected to keep prices elevated well into next year. Wood Mackenzie said utility-scale solar system prices could rise about 20% by the fourth quarter of 2026, with only limited relief in 2027 as new cell factories come online. The report added that if the 14 GW of cell manufacturing capacity now under construction is delayed, import reliance could deepen further. Looking further ahead, the consultancy expects 130 GW of additional cell capacity to be online by 2029, while the Ministry of New and Renewable Energy is already preparing to extend the domestic-content framework again with a proposed ALMM-III rule for wafers in June 2028.
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