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Data centres, green hydrogen and rising demand for round-the-clock clean power are expected to add 15-20 GW of additional annual solar demand in India from FY29, according to a sector deep-dive report by ValueQuest Investment Advisors.
The report said these demand drivers are currently "not in forecasts or mainstream analyst models" and could significantly accelerate India's solar expansion over the coming years. "Data centres, green hydrogen and night-time connectivity are expected to add 15-20 GW of additional annual solar demand from FY29, none of which appears in forecasts or mainstream analyst models," the report said. It added that total solar demand in India is "conservatively expected to reach ~85 GW annually by FY30." According to the report, India's solar market is no longer being driven by a single segment, but by "four separate, independently growing demand engines operating in parallel." These include utility-scale projects, commercial and industrial open access projects, agricultural solarisation under the KUSUM scheme, and rooftop solar installations. The report noted that India installed around 45 GW of solar capacity across segments in FY26, marking a sharp acceleration in deployment pace. "The first 50 GW took 11 years, the next 50 GW took 3 years, and the most recent 50 GW took just 14 months," it said. It further highlighted that India's future solar demand may be significantly higher than current market estimates due to the growing shift towards storage-linked renewable energy projects such as FDRE (Firm and Dispatchable Renewable Energy), RTC (Round-The-Clock) and Solar+BESS projects. The report explained that while a traditional 100 MW solar tender required around 140 MW of modules, "the same 100 MW in a complex format requires ~200 MW DC of modules." According to ValueQuest, the rising preference among DISCOMs for storage-backed renewable energy projects is creating a "structural module oversizing" trend, which means module demand is growing faster than headline installation numbers suggest. On the global solar landscape, the report said solar penetration still remains at an early stage despite rapid growth in installations worldwide. "Despite the pace of deployment, the world is now adding 1 GW of solar capacity every half day," the report noted. However, it added that solar "still accounts for less than 10% of global electricity generation." The report said India and China currently derive around 11 per cent of their electricity generation from solar power, while Europe stands at around 10 per cent. "By any reasonable measure, the penetration story has decades to run," it added. The report also pointed to emerging demand from artificial intelligence-led data centres. It said India has approved more than 300 data centre projects, while major global technology firms, including AWS, Microsoft and Google, have committed investments worth "Rs 2-3 lakh crore each." "AI inference requires 24x7 firm power -- only Solar+BESS can deliver this at scale cost-effectively," the report said. On green hydrogen, the report said India's target of producing 5 million tonnes annually by 2030 under the National Green Hydrogen Mission could become another major driver for solar demand. "Each MT requires ~20 GW dedicated solar," it said. (ANI)
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