India Eyes Record 50 GW Solar Capacity in 2026 as Domestic Supply Chain Gains Momentum

India added 34 GWdc (gigawatts direct current) of solar capacity in the first half of 2026 -- 38 per cent above the H1 2025 levels -- and the country is on track to record 50 GWdc this year, a new report showed on Thursday. India is set to commission more solar capacity in 2026 than in any year in its installation history, even as the policy driving that surge simultaneously creates a supply crunch that will push system prices significantly higher, according to new analysis from Wood Mackenzie.

India added 34 GWdc of solar capacity in the first half of 2026 as developers raced to commission projects ahead of the June deadline for the Approved List of Models and Manufacturers-II (ALMM-II). Full-year additions are forecast to exceed 50 GWdc, surpassing the previous record of 49 GWdc set in 2025, according to the report. “India's ALMM-II mandate is a bold step toward building a fully integrated domestic solar supply chain, but cell manufacturing capacity has simply not kept pace with modules," said Sureet Singh, Research Analyst, Wood Mackenzie.

The near-term cost impact is unavoidable, and developers will need to navigate a difficult transition period before prices stabilise, Singh added. The accelerated build-out in the first half this year was further driven by the phased removal of waivers for inter-state transmission charges, which fell from 75 per cent to 50 per cent for projects commissioned from July 2026 onwards and are set to be phased out entirely after July 2028.

Momentum is expected to slow in H2 2026 as cell capacity constraints and rising module prices weigh on project development. However, ALMM-II waivers granted for net metering and open access projects until December 31, 2026 could provide upside to that figure. The Ministry of New & Renewable Energy (MNRE) also agreed in July 2026 to waive the mandate for projects approaching completion, requiring applicants to have submitted applications by July 23, 2026.

While ALMM-II has reduced India's direct cell imports from China, sourcing has pivoted toward Southeast Asia, with Indonesian cell imports nearly tripling in early 2026. In the first five months of 2026, India imported 5 GW of wafers and 20 GW of cells, with wafer imports climbing 86 per cent year-on-year to support domestic cell production, according to the report. “Prices are expected to stabilise through 2029 as additional cell capacity comes online, but the transition will require policy consistency and timely execution by manufacturers,” said Mathew Thomas, Research Analyst, Wood Mackenzie.

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