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The Government of India is aiming to achieve 227 GW of renewable energy capacity by 2022, much ahead of its target 175 GW as per the Paris Agreement.

Renewable Energy Industry in India

    Last updated on Mar, 22 2021

Indian Renewable Energy Industry Report  (Size: 767.9 KB ) (January, 2021)


Indian renewable energy sector is the fourth most attractive renewable energy market in the world1. India was ranked fifth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2019.

Installed renewable power generation capacity has gained pace over the past few years, posting a CAGR of 17.33% between FY16-20. With the increased support of Government and improved economics, the sector has become attractive from investors perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role. The government is aiming to achieve 227 GW of renewable energy capacity (including 114 GW of solar capacity addition and 67 GW of wind power capacity) by 2022, more than its 175 GW target as per the Paris Agreement. The government plans to establish renewable energy capacity of 500 GW by 2030.

Market Size

As of November 30, 2020, the installed renewable energy capacity stood at 90.39 GW, of which solar and wind comprised 36.91 GW and 38.43 GW, respectively. Biomass and small hydro power constituted 10.14 GW and 4.74 GW, respectively. By December 2019, 15,100 megawatts (MW) of wind power projects were issued, of which, projects of 12,162.50 MW capacity has already been awarded2. Power generation from renewable energy sources in India reached 127.01 billion units (BU) in FY20.

With a potential capacity of 363 GW and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.3

Investments/ Developments

According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in the Indian non-conventional energy sector stood at US$ 9.68 billion between April 2000 and September 2020. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014. New investment in clean energy in the country reached US$ 11.1 billion in 2018.

Some major investments and developments in the Indian renewable energy sector are as follows:

  • In November 2020, SunSource Energy announced that it will develop a 4 MW grid-connected floating solar PV power project, along with a 2 MW Battery Energy Storage System (BESS) in Andaman and Nicobar Islands, which was won in a tender bid with the Solar Energy Corporation of India (SECI).
  • In November 2020, The Airports Authority of India (AAI) signed a memorandum of understanding with NTPC Vidyut Vyapar Nigam, an NTPC subsidiary to promote use of electric vehicles and set up solar power plants at its airports.
  • In October 2020, Patel Engineering announced that it has won an order worth Rs. 1,564.42 crore (US$ 211.15 million) to build 2,000 MW Subansiri Lower Hydro Electric project in Arunachal Pradesh.
  • India added 2,320 MW of solar capacity amidst COVID-19 pandemic from January to September 2020.
  • In October 2020, Tata Power announced its plan to develop 100 MW solar project in Dholera Solar Park of Gujarat.
  • In October 2020, post approval from NITI Aayog and the Department of Investment and Public Asset Management, NTPC set up a wholly owned company for its renewable energy business—NTPC Renewable Energy Ltd. NTPC is targeting to generate ~30% or 39 GW of its overall power capacity from renewable energy sources by 2032.
  • The Solar Energy Corporation of India (SECI) implemented large-scale central auctions for solar parks and has awarded contracts for 47 parks with over 25 GW of combined capacity.
  • In April 2020, Vikram Solar bagged a 300 megawatt (MW) solar plant project for Rs. 1,750 crore (US$ 250.39 million) from National Thermal Power Corporation Ltd (NTPC) under CPSU-II scheme in a reverse bidding auction.
  • Adani Group aims to become the world’s largest solar power company by 2025 and the biggest renewable energy firm by 2030.
  • Around Rs. 36,729.49 crore (US$ 5.26 billion) investment was made during April-December 2019 by private companies in renewable energy.
  • ReNew Power and Shapoorji Pallonji will invest nearly Rs. 750 crore (US$ 0.11 billion) in a 150 MW floating solar power project in Uttar Pradesh.


Government initiatives

Some initiatives by Government of India to boost India’s renewable energy sector are as follows:

  • In December 2020, SJVN Limited, a PSU under Ministry of Power entered into an MoU with Indian Renewable Energy Development Agency Ltd. (IREDA), a PSU under Ministry of New & Renewable Energy, to provide its services to SJVN for green energy projects.
  • In November 2020, Ladakh got the largest solar power project set-up under the central government’s 'Make In India' initiative at Leh Indian Air Force Station with a capacity of 1.5 MW.
  • In November 2020, the government announced production-linked incentive (PLI) scheme worth Rs. 4,500 crore (US$ 610.23 million) for high-efficiency solar PV modules manufacturing over a five-year period.
  • On November 17, Energy Efficiency Services Limited (EESL), a joint venture of PSUs under the Ministry of Power and the Department of New & Renewable Energy (DNRE), Goa, signed a memorandum of understanding to discuss roll-out of India’s first Convergence Project in the state.
  • In October 2020, the government announced a plan to set up an inter-ministerial committee under NITI Aayog to forefront research and study on energy modelling. This, along with a steering committee, will serve the India Energy Modelling Forum (IEMF), which was jointly launched by NITI Aayog and the United States Agency for International Development (USAID).
  • In August 2020, the government announced plans to offer land near its ports to companies for building solar equipment factories.
  • India plans to add 30 GW of renewable energy capacity along a desert on its western border such as Gujarat and Rajasthan.
  • Delhi Government decided to shut down thermal power plant in Rajghat and develop it into 5,000 KW solar park.
  • The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.
  • The Ministry of New and Renewable Energy (MNRE) has decided to provide custom and excise duty benefits to the solar rooftop sector, which will lower the cost of setting up as well as generate power, thus boosting growth.
  • Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33% by 2030.


Road Ahead

The Government is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 227 GW by 2022, of which about 114 GW is planned for solar, 67 GW for wind and other for hydro and bio among other. India’s renewable energy sector is expected to attract investment worth US$ 80 billion in the next four years. About 5,000 Compressed Biogas plants will be set up across India by 2023.

It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. * Use of renewables in place of coal will save India Rs. 54,000 crore (US$ 8.43 billion) annually3. Renewable energy will account for 55% of the total installed power capacity by 2030.

As per the Central Electricity Authority (CEA) estimates, by 2029-30, the share of renewable energy generation would increase from 18% to 44%, while that of thermal is expected to reduce from 78% to 52%.


Note: 1- According to Renewable Energy Country Attractiveness index 2018 by EY;
2- As per data from the Economic Survey; *According to the Bloomberg New Energy Outlook 2018; 3 - Greenpeace India, Union Budget 2020
21, SPV - Solar Photovoltaic System, MWeq - Megawatt Equivalent

References: Central Electricity Authority, Ministry of New and Renewable Energy, Media Reports, Press Releases

Note: Conversion rate used in December 2020, Rs. 1 = US$ 0.01357

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


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