Market Trends of India Renewable Energy Industry
Solar Segment to Witness a Significant Growth
During the forecast period, the solar segment is likely to have the biggest market share. This is because the cost of solar modules is going down, and these systems can be used for many different things, like making electricity and heating water.
- India is endowed with vast solar energy potential. About 5,000 trillion kWh of energy per year is generated over India's land area, with most parts receiving 4-7 kWh per square meter per day. There has been a visible impact of solar energy on the Indian energy sector during the last few years.
- The Ministry of New and Renewable Energy (MNRE) says that India's installed solar energy capacity was around 40.1 GW in 2020-2021, up from 34.6 GW in 2019-2020. This is an increase of about 16% over the course of the year. This growth results from huge investments in the upcoming solar energy projects in India.
- In December 2021, MNRE asked for Expressions of Interest for the evaluation study of Phase II of the grid-connected rooftop solar program.The program was part of the National Solar Mission, which aimed to connect 40 GW of solar rooftop systems to the power grid by 2022.
- Azure Power turned on a 600 MW solar power project in Bikaner, Rajasthan, in January 2022. At a cost of USD 0.03 per kWh, Solar Energy Corporation of India Limited (SECI) will purchase the project's power for 25 years.
- Hence, increasing investments in the solar energy sector are expected to boost the market's growth during the forecast period.
Understand The Key Trends Shaping This Market
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Supportive Government Policies and Programs Driving the Market Demand
- The Indian government has put in place a number of policies that will help increase the amount of renewable energy that is installed to 450 GW by 2030. These policies are set to achieve the targets during the forecast period. As of 2021, India had installed 151.39 GW of renewable capacity.
- As part of the Paris Climate Agreement, India promised that by 2030, 40% of its electricity would come from sources other than fossil fuels. To achieve this goal, the country has set an ambitious target of setting up 1,75,000 MW of renewable energy capacity, including 1,00,000 MW of solar power, by 2022. A target of 4,50,000 MW of installed RE capacity by 2030 has also been set.
- Under the Production Linked Incentive (PLI) scheme, the Indian government gave an extra INR 19,500 crore to help make solar PV modules in February 2022.
- The scheme has different ways to help set up integrated manufacturing units of high-efficiency solar PV modules by offering PLI on sales of these solar PV modules. It wants to reach the lofty goal of installing 280 GW of solar capacity by 2030.
- In September 2021, the Indian government said that it would give grants or funding for projects that use offshore wind and storage. The new scheme will help with the renovation and modernization of substations. The government has set a target of adding 30 GW of offshore wind energy projects by 2030.
- The Ministry of New and Renewable Energy (MNRE) has also run the Solar Park Scheme, the 300 MW Defense Scheme, and the 500 MW VGF (Viability Gap Funding) Scheme in the last three years. In January 2020, India made an ambitious target of having 450 GW of renewable energy by 2030. The central government, which was already planning to install around 100 GW of solar energy by 2022, made the announcement.
- During the forecast period, the Indian renewable energy market is expected to be driven by a number of policies from the central and state governments.
