India clarifies solar lending advice amidst overcapacity reports

The country achieved 50% non-fossil capacity early, reaching 259 GW as of October 2025.

India has clarified that it has not issued an advisory to stop lending to renewable energy power projects or equipment manufacturing facilities.

This comes after the Ministry of New and Renewable Energy said there have been reports that it has issued an advisory to lenders to pause fresh financing to Renewable Energy Projects amidst significant overcapacity concerns.

India has already achieved 50% of its installed electricity capacity from non-fossil fuel sources, five years ahead of the target set under its Nationally Determined Contributions to the Paris Agreement.

As of 31 October 2025, the installed capacity from non-fossil sources stands at about 259 gigawatts (GW), with 31.2 GW added in the current financial year up to October 2025.

The ministry said it has circulated to the Department of Financial Services and non-banking financial companies the status of present installed domestic manufacturing capacities across various sectors of solar PV manufacturing, as well as ancillary equipment. This aims to allow financial institutions to adopt a calibrated, well-informed approach whilst evaluating proposals for financing any manufacturing facility in the solar PV manufacturing sector, and to explore and expand their solar PV manufacturing portfolio to upstream stages.

“The Government of India is committed to making India self-reliant in solar PV manufacturing and establishing the country as a major player in the global value chain. This commitment is supported through a comprehensive set of initiatives, including the PLI Scheme for High Efficiency Solar PV Modules and measures to provide a level playing field for the Indian manufacturers,” the ministry said.

These interventions have resulted in an expansion of solar module manufacturing capacity, from just 2.3 GW in 2014 to around 122 GW, as listed in MNRE’s Approved List of Models and Manufacturers (ALMM).