India’s Renewable Energy Sector – The renewable energy sector in India is expected to grow significantly in the next years. According to a recent analysis by CareEdge Ratings, projections suggest an increase of roughly 45 gigatonnes (GW) by fiscal year 2025. This expansion can be ascribed to a healthy project pipeline and an appealing bidding roadmap that entices developers to enter the market. In this article, we will look deeper into the factors fueling this increase as well as the government’s attempts to encourage the use of renewable energy.
According to a CareEdge Ratings assessment, yearly renewable energy capacity additions in India are likely to range between 20 and 25 GW over the next two fiscal years. This phenomenal expansion has been powered primarily by a solid pipeline of over 55 GW assets now under development. India is prepared for significant expansion in its renewable energy sector, with an annual renewable energy installation of over 20 GW in fiscal year 2024, primarily from solar projects, followed by a jump to more than 25 GW the following year.
The substantial project pipeline demonstrates India’s strong interest in and investment in renewable energy. Developers recognize the sector’s potential and are actively participating in the bidding process to secure projects. The government’s attempts to shorten the bidding process and offer an appealing roadmap have been critical in attracting companies. The sector’s growth prospects are bright due to the country’s favorable investment climate and significant renewable energy potential.
India’s Renewable Energy Sector
The one-year suspension of the approved list of module manufacturers (ALMM) is a crucial driver of the predicted surge in solar capacity. This temporary pause is especially helpful for untapped solar power greater than 25 GW, when the agreed tariff is less than Rs. 2.5 per unit. By extending the ban until March 2024, the government has given developers more time to complete ongoing projects. This action not only makes solar project creation easier, but it also helps developers to make the best use of untapped potential.
Furthermore, the report notes a good trend in solar module pricing, with a significant decline from 28-30 cents per watt to 21-22 cents per watt. This price decrease is a big windfall to the industry, making renewable energy projects more economically viable. Lower module prices translate into lower project costs, making renewable energy a more appealing option for both investors and customers. The falling cost of solar modules paves the path for further use of solar energy solutions throughout India.
The study emphasizes the government’s significant emphasis on encouraging pumped storage projects to overcome the intermittent issues associated with renewable energy sources. The target is to have 26.7 GW of storage capacity by fiscal year 2032. To meet this ambitious goal, a total capital expenditure of roughly Rs. 1.6 lakh crore is expected, with debt financing of around Rs. 1.2 lakh crore. This investment in storage infrastructure will be critical in guaranteeing a secure and stable power supply, supporting the integration of renewable energy into the grid.
India’s renewable energy sector is at the vanguard of a dramatic revolution, set for significant expansion and contributing to the accomplishment of the Sustainable Development Goals (SDGs). With forecasts indicating an increase of about 45 gigatonnes (GW) by fiscal year 2025, the sector has the ability to drive progress across many SDGs. India can contribute to SDGs 7 (Affordable and Clean Energy), 9 (Industry, Innovation, and Infrastructure), 13 (Climate Action), and others through continuous investments, policy support, and innovation. Growth in the sector can have a positive impact on other SDGs, such as SDG 1 (No Poverty), SDG 3 (Good Health and Well-being), and SDG 8 (Decent Work and Economic Growth).