Electrical energy supplied is expected to be flattish on year in H1FY26. This came even as economic activity was bounteous, evidenced by high real GDP growth recorded in Q1FY26, due to above normal monsoons. Not only did the cooling effect impair domestic demand, but it also reduced the use of pumps for irrigation. These effects were particularly profound in the Northern Region, which usually leads energy demand. We expect a pickup in energy demand in the next two quarters as is characteristic of recent years which have seen sharp inter-quarter variations in demand. This will be driven by a festive season buttressed on a consumption boost, industrial revival, and the withdrawal of showers.

Installed capacity additions of solar power to post a fresh record in FY26 and its share in generation is growing

A net installed capacity of over 20 GW has been added in 5MFY26, of which over 85% comprises of solar power. This breakneck pace is expected to continue for the remainder of the fiscal, and we expect over 45 GW of solar capacities to be added in FY26. Besides fervent awarding from REIAs and States driving utility additions, rooftop and open-access solar are emerging as avenues of effervescence. Over 20% of installed solar capacities now comprise rooftop and off-grid systems, significantly higher than before. Amidst this fecund ground for growth, revised GST norms are another ray of sunshine. The reduction in GST from 12% to 5% will make installation and maintenance cheaper and present an even more compelling case to the consumer.

ALMM-II (for cells) a shot in the arm for upstream players as they look to rapidly unveil integrated facilities

Riding on the epic success of ALMM-I in creating a virtually self-sufficient solar module ecosystem in India, the Union has announced timelines for ALMM-II. The recent amendment, while tweaking timelines to give players enough time for scale up capacities, is in line with the original announcement in keeping the effective date unchanged from 01 Jun’26. Cell capacities currently lag that of modules, and several players have announced expansion plans to make good this gap and make India self sufficient in cells. Notably, ALMM-II includes in its scope open access projects, making the market for cells larger. With DCR norms already in place, a glide path towards ALMM-II exists.

A possible ALMM-III (for wafers) represents the next stage of government support for a self-reliant India in solar panels

The draft notified by the Union on the possible introduction of ALMM-III for wafers is an extension of previous ALMM announcements. India currently imports much of its wafer requirement. Hence the government has proposed preconditions to ensure that ample capacities are present before the introduction of ALMM-III to ensure minimal market distortions. This includes the mandate that there must be atleast 3 independent wafer manufacturers with an aggregate capacity of 15 GW. Preparations for this goal are already underway with India’s unique polysilicon-module PLI scheme paving the way for success.

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Quality, efficiency, and technology of panels to emerge as key differentiators as the market matures

With module capacity under ALMM-I crossing the magic 100 GW mark, the panel space has entered the next stage of its evolution. Module makers are trying to carve out niches for themselves. Technology is emerging as a salient feature with a race to build modules >700 Wp and >23% efficiency. This push may also be seen in the increased preponderance of n-type TOPCON and HJT modules. Some players are offering bundled equipment and services for specific use cases, such as solar rooftop, making end-user segmentation as their USP. Yet others focus on specific markets such as export or DCR-compliant space. The constant race for quality, innovation, low-cost, and ease of use will keep Indian panel makers amongst global leaders.