• Source:JND
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The Ministry of New and Renewable Energy (MNRE) has denied reports suggesting that it has instructed banks or financial institutions to stop providing loans to renewable energy projects or to manufacturers supplying equipment for these projects. The Ministry said such claims are “entirely false” and clarified that India continues to support expansion in the clean energy sector.

MNRE explained that it had only shared data on solar photovoltaic (PV) manufacturing capacity with key financial bodies including the Department of Financial Services, PFC, REC and IREDA to help them assess loan proposals more carefully and avoid imbalanced investments.

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Government Push For Solar Manufacturing Continues

The Ministry stated that the government remains committed to strengthening domestic solar PV manufacturing and building India into a major global hub. It highlighted that the Production Linked Incentive (PLI) scheme for high-efficiency solar modules is already in place to support this objective.

Along with the PLI scheme, other incentives have helped expand India’s solar module manufacturing capacity from only 2,300 MW in 2014 to about 1,22,000 MW at present. MNRE said it will continue to collaborate with the industry to make India’s solar supply chain more competitive and resilient.

Industry Concerns Triggered Overcapacity Debate

The Ministry’s clarification comes amid rising concerns within the solar industry. In November 2025, the All India Solar Industries Association (AISIA) wrote to MNRE warning that the rapid growth of solar module manufacturing could lead to significant overcapacity.

According to AISIA, India’s module production capacity has grown to nearly four times the country’s annual domestic requirement. The association said this imbalance could result in heavy financial losses, unused capacity, and pricing pressures.

Following this, MNRE issued an office memorandum on December 4. The document outlined the existing and upcoming manufacturing capacities across modules, cells, ingots, wafers and polysilicon. It advised financial institutions to adopt a cautious approach when funding new projects and to consider shifting investments towards upstream manufacturing segments such as polysilicon and wafers, where India still has limited capacity.

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India’s Renewable Targets and Investment Needs

India aims to generate 5,00,000 MW of electricity from renewable energy sources by 2030. As of 31 October 2025, the country’s installed non-fossil power capacity stands at around 2,59,000 MW, with 31.2 GW added in the first seven months of the 2025–26 financial year.

A 2023 study estimated that India will require nearly $500 billion to create an additional 3,00,000 MW of renewable power capacity across solar, wind and other clean sectors highlighting the scale of investment needed to meet national targets.

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