India’s Solar Additions Set to Surpass 50 GW in 2026 Despite Supply Constraints: Wood Mackenzie

India is on track to achieve its highest-ever annual solar capacity addition in 2026, with installations expected to exceed 50 GWdc, according to Wood Mackenzie’s report From Modules to Cells: India Deepens its Solar PV Push. The projected growth comes despite emerging supply constraints and higher system prices following the implementation of the Approved List of Models and Manufacturers-II (ALMM-II) framework.

India added 34 GWdc of solar capacity during the first half of 2026, marking a 38% year-on-year increase compared with H1 2025. Developers accelerated project commissioning ahead of the June deadline for ALMM-II, which requires modules used in government-supported projects to incorporate domestically manufactured solar cells. If the forecast is achieved, India’s 2026 additions will exceed the previous annual record of 49 GWdc set in 2025.

The deployment momentum was also supported by the phased reduction of inter-state transmission charge waivers. The waiver declined from 75% to 50% for projects commissioned from July 2026 and is scheduled to be completely phased out after July 2028.

However, Wood Mackenzie expects solar deployment to moderate during the second half of 2026 as limited domestic cell manufacturing capacity and rising module prices create additional pressure on project development. At the same time, ALMM-II exemptions for net-metering and open-access projects until December 31, 2026, could provide further support to installations.

In July 2026, the Ministry of New and Renewable Energy (MNRE) also agreed to waive the ALMM-II requirement for projects nearing completion, subject to applicants having submitted their applications by July 23, 2026.

According to Sureet Singh, Research Analyst at Wood Mackenzie, ALMM-II represents an important step towards establishing an integrated domestic solar supply chain. However, domestic cell manufacturing capacity has not expanded at the same pace as module production, creating near-term cost pressures for project developers.

While ALMM-II has reduced India’s direct dependence on Chinese solar cell imports, sourcing has increasingly shifted towards other markets in Southeast Asia. Indonesian solar cell imports nearly tripled during early 2026, highlighting the changing dynamics of India’s solar supply chain.

During the first five months of 2026, India imported 5 GW of wafers and 20 GW of solar cells. Wafer imports increased by 86% year-on-year, supporting the expansion of domestic cell manufacturing. India currently levies a 20% basic customs duty on imported solar cells and modules.

The domestic manufacturing push is also being reinforced through trade measures. In September 2025, the Directorate General of Trade Remedies (DGTR) recommended additional anti-dumping duties of up to 30% on Chinese-origin solar cells and modules. However, the Central Government’s final decision on the recommendation remains pending.

Wood Mackenzie has warned that delays in commissioning the 14 GW of cell manufacturing capacity currently under construction could increase India’s dependence on imports and put further upward pressure on solar equipment prices. An additional 130 GW of cell manufacturing capacity is expected to come online by 2029, requiring a 49% compound annual growth rate from the projected 88 GW full-build capacity in 2026.

Despite this expected expansion, the report forecasts that supply shortages will continue into 2027. Indian solar cell production is projected to reach 29 GW, which would still be around 21 GW below average annual module demand of approximately 50 GW.

As a result, system prices are expected to decline by only 3% between Q4 2026 and Q4 2027. Prices are then expected to stabilise through 2029 as additional domestic cell manufacturing capacity becomes operational.

Mathew Thomas, Research Analyst at Wood Mackenzie, said policy consistency and timely execution by manufacturers will be critical to stabilising solar equipment prices. The planned implementation of ALMM-III in June 2028, which would extend domestic content requirements to solar wafers, indicates that India’s efforts to build a deeper and more integrated domestic solar manufacturing ecosystem are likely to continue.