Confirming the development, Santosh Kumar Sarangi, Secretary, Ministry of New and Renewable Energy, told The Secretariat, “We are in the process, and it will be released in the next 15 to 20 days.”

He said that the next phase of the energy transition will focus on strengthening system capabilities through several projects, including floating solar. 

We are in the process, and it will be released in the next 15 to 20 days

- Santosh Kumar Sarangi, Secretary, Ministry of New and Renewable Energy

Last week, the Union Cabinet gave its nod for the scheme, which will be implemented from this financial year till 2030-31. 

Floating Solar To The Mainstream

The policy marks a shift from viewing floating solar as a niche technology to making it a mainstream pillar of India's renewable energy strategy. Alongside financial incentives, it seeks to create an enabling ecosystem through streamlined approvals, standardised safety protocols and clearer implementation rules, to unlock the country's assessed floating solar potential of more than 102 gigawatts (GW).

As part of this broader policy push, the National Dam Safety Authority (NDSA) has constituted a committee to prepare Standard Operating Procedures (SOPs) for floating solar projects on dams and reservoirs, addressing one of the sector's biggest regulatory gaps.

Together, the policy framework, financial incentives, and safety guidelines are expected to address long-standing regulatory and operational hurdles that have prevented the sector from scaling. “The committee has reached its final decision with respect to SOPs that it is going to share with the ministry. There are two major aspects, including how to address the external threat to dam safety and the revenue-sharing model,” sources said.

“The committee will share SOPs for the movement of officials and developers in the critical areas related to dams and reservoirs while the project is in process, and it has also asked for a certain chunk of the revenue to be shared for the operation and maintenance of that particular dam where the installation will happen,” people aware of the matter said. 

With this, for the first time, dam authorities will have a common operating framework for evaluating floating solar projects, reducing uncertainty over safety and operational requirements that have often delayed approvals.

India’s Experiment With Floating Solar

The total assessed floating solar potential is 102 GW. However, current operational floating solar capacity is at only 700 megawatts (MW), which is less than 1 GW, highlighting a massive gap between what the country’s waterbodies can support and what has been built so far. 

Unlike conventional ground-mounted solar parks, floating solar projects require approvals from multiple agencies, including dam authorities, water resource departments, state utilities and power developers. The absence of a dedicated policy framework has meant that every project has followed a different approval pathway, increasing costs and uncertainty for developers.

According to Arun Kumar, Professor, Department of Hydro and Renewable Energy, IIT-Roorkee, who was involved in developing the draft policy framework along with MNRE and the National Institute of Solar Energy (NISE), the sector’s biggest challenge has never been technology.

“The limited deployment of floating solar is primarily due to the absence of a comprehensive policy framework, fragmented approvals, lack of identified project sites, and coordination challenges among multiple stakeholders,” Kumar told The Secretariat.

The proposed framework, he said, seeks to address these institutional bottlenecks by recommending streamlined approvals, systematic identification and prioritisation of suitable water bodies, and implementation mechanisms that reduce project risks and improve investor confidence.

The limited deployment of floating solar is primarily due to the absence of a comprehensive policy framework, fragmented approvals, lack of identified project sites, and coordination challenges among multiple stakeholders

- Arun Kumar, Professor, Department of Hydro and Renewable Energy, IIT-Roorkee

Faruk G. Patel, Founder, Chairman & Managing Director, KPI Green Energy Ltd, said that one of the biggest barriers in scaling the project has been the cost of installing floating solar panels. 

Speaking to The Secretariat, he said, “Floating solar needs specialised hardware, high-density polyethylene floats, marine-grade corrosion-resistant metals, waterproofing and heavy-duty underwater anchoring lines, which makes it cost more to build than land-based panels because of this specialised hardware needed to resist rusting in water.” 

He said that this is also a newer technology with limited long-term data on how sustained water exposure affects panels, cables, and floats over their lifespan, adding perceived risk for lenders. 

Floating solar needs specialised hardware, high-density polyethylene floats, marine-grade corrosion-resistant metals, waterproofing, and heavy-duty underwater anchoring lines, which makes it cost more to build than land-based panels because of this specialised hardware needed to resist rusting in water

- Faruk G. Patel, Founder, Chairman & Managing Director, KPI Green Energy Ltd

With land-based solar tariffs already near ₹2.44/unit, developers had little incentive to absorb this cost premium, and no dedicated Viability Gap Funding or storage-linked support existed until now.

Beyond Land Savings

Floating solar has increasingly gained attention as India's search for land for utility-scale renewable energy becomes more challenging. By using existing reservoirs, the technology avoids competition for agricultural land while also reducing water evaporation and improving panel efficiency through the cooling effect of water.

The upcoming policy is also expected to encourage integration of floating solar projects with Battery Energy Storage Systems (BESS), allowing renewable power generated during the day to be stored and supplied during evening peak demand. Such integration could improve grid reliability and increase the value of floating solar projects.

Financial Gap Remains

According to Patel, the financial incentive in the upcoming scheme is a stopgap and not a full fix. 

The Ministry of New and Renewable Energy had sought around ₹6,700 crore, but the Expenditure Finance Committee approved a lower ₹5,500 crore. Separately, officials have flagged that MNRE approached the Finance Ministry for VGF worth ₹7,000–8,000 crore for floating solar with battery storage across roughly 300 GW of reservoir capacity, a much larger ask than what’s cleared. 

Patel further said, “The gap likely shows up in per-MW viability gap funding levels, especially for deep reservoirs needing costlier anchoring and floaters, and in storage costs, since Battery Energy Storage System (BESS) integration itself is capital-intensive. Expect the scheme to seed early projects rather than fund the sector at scale; private capital and state-level incentives will need to fill the rest.”

Moreover, developers need clarity on water-body allocation processes, including reservoir leasing terms, tenure length, predictable tariff and Power Purchase Agreement (PPA) frameworks specific to floating solar’s higher cost base, and firm timelines for environmental and waterbody clearances, which currently vary by state. 

Grid upgrade pace lagging renewable capacity growth risks curtailment, so transmission planning certainty matters as much as capex support. Standardised technical codes for anchoring, float durability and safety would reduce lender risk. 

Floating Solar Sector Outside India

China has the World’s largest floating solar market, with around 960 MW already installed in early deployments, and the country continues to lead globally with large projects on flooded coal mines and reservoirs. 

On the other hand, Japan has around 210 MW installed floating solar due to limited land availability and excess reservoirs. 

South Korea has 80 MW installed capacity, while it has announced one of the world’s largest floating solar projects with a 2.1 GW installation at Saemangeum.

Globally, floating solar has moved from an experimental technology to a strategic renewable energy option, particularly in countries facing land constraints. 

India's forthcoming floating solar policy seeks to follow a similar trajectory by addressing the regulatory uncertainty that has kept its installed capacity at just around 700 MW.