Module Shortage and Policy Challenges Slow Down India’s Utility-Scale Solar Projects

Investment in the Indian solar sector decreased by 171% year-over-year to $1.03 billion in Q1 2023. This was due to a 30% decline in solar installations, which was primarily caused by the postponement of several large projects.

The overall investments were also affected by decreased capital inflows into manufacturing during the same period, given the suspension of the Approved List of Models and Manufacturers regulations, the consequent demand uncertainty, and deferred capacity expansion plans.

However, there were a few important investment deals during the quarter, including:


  • A $450 million investment in Hero Future Energies by Ardor Holding II Pte, a special purpose vehicle indirectly owned by global investment firm Kohlberg Kravis Roberts.
  • A capital infusion of ₹20 billion (~$260 million) in Tata Power Renewable Energy from UK-based GreenForest New Energies.
  • A green financing loan of ₹9.15 billion (~$111 million) from the Japan Bank for International Cooperation to construct two solar power projects in India by government-owned SJVN.
  • A ₹3.03 billion (~$37 million) green bonds issue by the Indore Municipal Corporation, which was oversubscribed by 1.24 times.
  • A $25 million equity and debt capital raise in Ecozen’s Series C round.


These deals suggest that there is still interest in the Indian solar sector, despite the recent decline in investments. However, it is important to note that the sector is facing a number of challenges, which will need to be addressed in order to sustain its growth.