How Data centres are driving he next wave of solar growth

The renewable energy companies are buzzing in Friday’s trade amid a key earnings release by the solar power equipment manufacturers like Premier Energies, Vikram Solar and others. The broader earnings show strong demand traction for solar power equipment led by multiple factors.

The earnings presentation threw light on key industry trends where solar power generation is growing at a healthy pace among other power generation resources. In H1 2026, solar power contributed to 14% of the total power output, up from ~9% in the previous year. The sharp growth in solar power generation is led by strong power generation capacity expansion and favourable government and state subsidies.

Data Centres are experiencing strong demand for power generation and solar power remains a pivotal resource among the traditional ones. Here is how data centres are proving to be a new demand engine for solar power generation.

Data Centre

The Artificial Intelligence ecosystem is receiving strong traction across the globe, with solid demand for Data centres, which house other critical equipment like chips, fibre optics and others. However, power remains a very crucial ingredient for running the AI ecosystem. As computing demand increases multifold, the demand for power generation would also increase along the way. Uninterrupted and affordable resource of power remains a critical for data centre’s growth and solar power is proving to be beneficial in augmenting its performance.

Power demand from data centres

Industry reports from KPMG India showed that solar power demand from data centres could hit 24 GW by 2030. The current installed capacity stands at 1.9 GW and 4.5 GW in pipeline. The difference between current capacity and potential demand requires a capacity addition growth of 28.5% CAGR. The gap between installed capacity and potential demand reflects the growth potential for solar makers and equipment manufacturers.

Policy support

The demand is also institutionalised via policy measures made by several states for its data centre sector growth. In line with this, Gujarat data centre policy 2026-29 targets 7.5 GW AI data centre capacity with ₹6 trillion in investment. In addition, data centres are mandated to fulfil Minimum 51% energy requirements from renewable sources.

Long term visibility

Data centres operators are one of the big customers of renewable power, creating multiplier demand for solar power. A 1 GW of uninterrupted supply of power throughout the day, would require a capacity of 4-6 GW. This also generates long-term power demand visibility, with data centres signing long-term contracts for 10-20 years.