India's Solar Power Demand to Grow 22 Percent Annually till FY35, Says Report

India's solar energy demand is expected to witness strong growth over the next decade, supported by rising electricity consumption, expansion of data centers, and increasing adoption of artificial intelligence technologies, according to a report by Nuvama.

The report projects solar energy demand to grow at a compound annual growth rate (CAGR) of 22 percent between FY26 and FY35. During this period, India's total power consumption is expected to increase significantly from around 1,848 billion units (BU) to nearly 3,228 BU.

Solar power is forecast to play a much larger role in meeting the country's energy needs. Its share in total power consumption is expected to rise from about 9 percent in FY26 to 33 percent by FY35 under the base-case scenario. In a more optimistic outlook, solar's contribution could reach 37 percent.

A key driver of this growth is the rapid expansion of data centers, which require large amounts of electricity to support digital services and AI-driven applications. The report noted that power expenses account for nearly 30–40 percent of data center operating costs, encouraging operators to increasingly adopt renewable energy sources such as solar power to reduce costs and lower emissions.

The study also highlighted that growing demand from the green hydrogen sector and data center industry could add an incremental 416 GW of solar capacity by FY35 under the base-case scenario.

As India advances its clean energy transition and digital economy ambitions, solar energy is expected to emerge as a major contributor to the country's future power mix.