The Ministry of New & Renewable Energy (MNRE) on Sunday dismissed reports suggesting that it has asked financial institutions to pause fresh lending to renewable energy projects.
The clarification comes amid concerns of oversupply in India’s solar photovoltaic (PV) module industry and follows earlier communication urging lenders to take a cautious view on financing new, standalone module manufacturing capacity.
India has reached 50 per cent of its installed power capacity from non-fossil fuel sources, five years ahead of its Paris Agreement target. As of 31 October 2025, non-fossil capacity stands at about 259 GW, including 31.2 GW added so far in FY26.
The ministry said that there has been “no advisory to Financial Institutions for stopping lending to either renewable energy power projects or to renewable energy equipment manufacturing facilities.”
It further said that the objective is not to halt financing but to ensure informed capital deployment across the solar manufacturing ecosystem.
The MNRE confirmed circulating the status of domestic manufacturing capacities to the Department of Financial Services and institutions such as PFC, REC and IREDA. According to the ministry, this information has been shared so that institutions “adopt a calibrated and well-informed approach while evaluating proposals for financing any manufacturing facility in solar PV manufacturing sector and explore and expand their solar PV manufacturing portfolio to upstream stages like solar cells, ingots-wafers and polysilicon as well as solar module ancillaries like solar glass and aluminium frames, etc. as well, rather than being limited to financing solar PV module manufacturing facilities alone.”
The clarification follows media reports stating that rapid expansion of standalone module units, combined with weakening export demand, could push the domestic market into oversupply.
Over the last three years, several Indian companies scaled up module capacity to target the U.S. market. However, higher U.S. tariffs and increased scrutiny of Indian shipments involving China-origin components have curbed exports, contributing to excess capacity in India.
Industry projections indicate module manufacturing capacity could rise to nearly 200 GW in the next few years, while solar cell capacity could grow to 100 GW—well above India’s near-term installation pace. This comes at a time when new solar project execution has slowed due to muted demand.
“The Government of India is committed to make India self-reliant in solar PV manufacturing and establish the country as a major player in the global value chain,” the ministry said.
It noted that solar module manufacturing capacity has expanded from 2.3 GW in 2014 to around 122 GW enlisted in the Approved List of Models and Manufacturers today—reflecting the cumulative efforts of industry, state governments and central initiatives.
The ministry added that it remains committed to further strengthening the solar manufacturing ecosystem through continued policy support, infrastructure development, and innovation,” and will continue working with stakeholders to ensure the sector remains competitive and future-ready.
