The Indian solar energy sector is experiencing rapid growth, driven by strong domestic demand and a thriving Middle East market. While US companies dominate the EPC and O&M rankings, Indian firms are making significant strides, particularly in the EPC sector. Larsen & Toubro and Sterling & Wilson are among the top EPC contractors, with Larsen & Toubro boasting the second-largest pipeline of EPC capacity globally. This growth is fueled by a surge in solar PV capacity, with India becoming the world's third-largest market for operational capacity.
The scale of growth in India has almost matched that of the US, according to de Koning. This is largely due to high demand for new EPC work from asset owners in the Middle East, which has created opportunities for Indian companies. However, Indian contractors have also become major exporters, with Larsen & Toubro building more projects in Saudi Arabia than at home. This shift in focus is evident in the RenewAtlas and Wiki-Solar data, which highlights the distinction between EPCs that 'build big' and those that 'build often'.
Indian companies engage in both types of projects, but recent growth is 'firmly at the large end', with projects above 100MW accounting for around 70% of India's operating capacity. This trend is further supported by the Solar Energy Corporation of India's tender in June, which sought 1.2GW of solar PV alongside 600MW/3.6GWh of battery energy storage systems. The inclusion of batteries in the tender reflects the government's focus on renewable and reliable power supply.
In contrast, Indian project developers and independent power producers (IPPs) have a more domestic focus. While Adani and NTPC are among the top project developers, they operate almost exclusively in India, unlike their global counterparts. This is evident in the rankings, where India-based IPPs and developers dominate the domestic market, leaving fewer opportunities for overseas developers. The regulatory frameworks, such as the Approved List of Modules and Manufacturers (ALMM), further encourage the use of domestically-manufactured components, fostering the growth of Indian solar companies.
However, the Indian solar sector presents a unique challenge for overseas developers. The market is highly competitive, with around 85% of capacity built by domestic firms. This has led to a limited presence of Chinese contractors and a strong presence of European firms. The disparity between Indian and overseas companies is evident in the project development pipelines, with some of the largest pipelines not being built in India. This highlights the importance of understanding the local market dynamics and regulatory frameworks for successful participation in the Indian solar energy sector.
