Ahead of the 2025 Union budget, the renewable energy sector is expecting a further boost to the green agenda and is hoping for targeted policy measures for sustainable growth. As India accelerates its transition towards a sustainable future, its renewable energy (RE) sector has witnessed unprecedented growth. In 2024, the country made significant strides in solar and wind energy installations, policy advancements, and infrastructural improvements, setting the stage for ambitious targets in 2025. With a commitment to achieving 500 GW of non-fossil fuel-based energy capacity by 2030, India is emerging as a global leader in clean energy. As on 20th Jan 2025, India’s total non-fossil fuel based energy capacity has reached 217.62 GW.
The year 2024 saw a record-breaking 24.5 GW of solar capacity and 3.4 GW of wind capacity added, reflecting a more than twofold increase in solar installations and a 21% rise in wind installations compared to 2023. This surge was driven by government incentives, policy reforms, and increased investments in domestic solar and wind turbine manufacturing. Solar energy remained the dominant contributor to India’s renewable energy growth, accounting for 47% of the total installed renewable energy capacity. Last year saw the installation of 18.5 GW of utility-scale solar capacity, a nearly 2.8x increase compared to 2023. Rajasthan, Gujarat, and Tamil Nadu emerged as the top-performing states, contributing 71% of India’s total utility-scale solar installations.
The rooftop solar sector also experienced significant growth in 2024, with 4.59 GW of new capacity installed, marking a 53% increase from the year 2023. The PM Surya Ghar: Muft Bijli Yojana, launched in 2024, played a crucial role in this expansion, facilitating 7 lakh rooftop solar installations within ten months. Additionally, the off-grid solar segment recorded a 182% increase, adding 1.48 GW in 2024, furthering India's energy access goals in rural areas.
India added 3.4 GW of new wind capacity in 2024, with Gujarat (1,250 MW), Karnataka (1,135 MW), and Tamil Nadu (980 MW) leading the way. These states accounted for 98% of the new wind capacity additions, highlighting their continued dominance in wind power generation.
Budget Expectations:
Enhanced allocation for Ministry of New & Renewable Energy: Ministry of New & Renewable Energy (MNRE) played a pivotal role in fostering RE growth through policy interventions and financial support. The government actively pursued the development of green hydrogen policies to reduce costs and attract investments in this emerging sector. The ministry needs a further boost in allocations to drive this agenda over coming years.
Solar energy: Solar sector has been a key component of renewable energy growth as it has recently reached an installed capacity of approximately 100 GW. However, there are still concerns about domestic manufacturing and the industry is expecting continued support for PLI schemes in solar panels, modules, and PV cells will drive self-reliance and reduce import dependency.
More investment needed in transmission infrastructure and energy storage capacity: The budget should have policies that support renewable energy and domestic manufacturing as well as extend the waiver on transmission charges for the renewable sector.
Ease in financing: Reconsidering the RBI’s draft circular on increased provisioning for infrastructure projects and creating a dedicated priority sector lending category for renewable energy could enhance funding access and reduce costs for the sector.
Outlook:
India’s renewable energy sector is on a transformative journey, with 2024 marking a year of record capacity additions and policy advancements. As the country moves into 2025, addressing regulatory, financial, and infrastructural challenges will be crucial. With continued policy support, increased investment, and a focus on emerging technologies, India is well-positioned to achieve its ambitious renewable energy targets and solidify its status as a global leader in the clean energy transition.
Union minister Nitin Gadkari has recently said the Indian electric vehicle market potential is likely to touch Rs 20 trillion and will create around 50 million jobs across the entire EV ecosystem by 2030. Addressing the '8th Catalyst Conference on Sustainability of E-Vehicle Industry - Evexpo 2024', Gadkari said estimated electric vehicles finance market size will be around Rs 4 trillion by 2030. The road transport and highways minister said 40 per cent of air pollution in India is because of the transport sector, highlighting need to promote renewables and clean energy on a consistent basis.