2024: A landmark year for green energy in India with record renewable addition and policy momentum

High domestic demand, increasing module manufacturing capacity and falling component prices saw domestic module prices also dropping by 10 percent on-year to 10 cents/Wp through December.

India’s clean energy landscape took a defining shape in 2024 with record renewable capacity tendering and installations along with a bunch of policy announcements aimed at making the country more self reliant and curbing cheap imports from China.

India reached a significant milestone this year with the country's total renewable energy (RE) capacity crossing the 200 GW (gigawatt) mark. This growth aligns with the country's ambitious clean energy target of achieving 500 GW from non-fossil sources by 2030. As of November 30, India had 213.70 GW of installed non-fossil power capacity, which includes 94.17 GW solar power, 47.96 GW wind power, 11.34 GW bio-power, 5.08 GW small hydropower, 46.97 GW large hydropower and 8.18 GW nuclear power. The total installed energy capacity in the country as of November 30 stood at 456.76 GW which includes 243.06 GW thermal energy, 8.18 GW nuclear energy and 205.52 GW renewable energy. It is in 2024 that clean energy now constitutes at least 45 percent of India’s total power generation capacity.

Also Read: iDEX-like scheme for green energy on the cards: MNRE Secretary

In the calendar year 2023, a total renewable capacity of 13.5 GW was installed, whereas between January and November this year alone the capacity addition doubled with the country adding at least 24 GW.

Union Minister for New and Renewable Energy Pralhad Joshi told Moneycontrol that another landmark decision by the government in 2024 was the launch of the PM Surya Ghar: Muft Bijli Yojna, which aims to have rooftop solar installations in one crore households with an outlay of Rs 75,000 crore. “Currently the scheme stands at more than 7.10 lakh installations and more than 1.50 crore registrations. Overall, the total renewable energy generation, which was stuck at just 193.50 billion units in 2013-14, has more than doubled to 359.89 billion units in 2023-24,” he said.

Record bidding and unsold power

In a first, bidding activity witnessed a significant jump with 47 GW renewable capacity auctioned in FY24. This is the highest-ever capacity auctioned in a single year. The bidding activity continued to remain sizeable with about 27 GW auctioned in the first eight months of FY25.

While the increase in bidding activity is positive providing a pipeline for capacity addition, there are delays in the signing of power purchase agreements (PPAs) / power sale agreements (PSAs) by the central bidding agencies with the state distribution utilities. The issue of unsold energy came to light after the indictment of Gautam Adani and others by the US Department of Justice and the Securities and Exchange Commission. Industry estimates show that nearly 40 GW of green projects have no takers.

“Given that the renewable purchase obligation (RPO) trajectory is set to increase from 29.91 percent in FY25 to 43.33 percent in FY2030, the state discoms must increase their procurement of renewable energy through signing of new PPAs/PSAs to meet this target. In this context, the enforcement of RPO norms by the state electricity regulators remains important to ensure timely signing of the PPAs/PSAs by the discoms,” said Girishkumar Kadam, Senior Vice President & Group Head - Corporate Ratings, ICRA Ltd.

Also Read: Centre to launch PLI scheme for power transmission sector by end of FY25

He said execution challenges remain an area of concern for the sector, with respect to delays in land acquisition and transmission connectivity, which if sustained could hamper the capacity addition prospects.

Manufacturing in the renewable sector

India was almost absent in the solar manufacturing scene, with only 2 GW of solar module production until a decade ago. In 2024, India’s solar module manufacturing skyrocketed to 60 GW and by 2030, the government aims to hit 100 GW.

Until the last financial year, India had almost no domestic production of solar cells and wafers. In 2024, India now has 12 GW of solar cell production and 2 GW of wafer production. “By 2030, we are confident that our capacity will soar to 70 GW for cells and 40 GW for wafers, reducing our dependence on imports and becoming a self-sustaining powerhouse,” Union minister Pralhad Joshi told Moneycontrol.

Also Read: Exclusive | Will award 7.8 lakh tpa new green hydrogen production

A number of policy moves also helped India hugely ramp up its solar manufacturing capacity. Implementation of the Approved List of Models and Manufacturers for solar modules (ALMM-I) from April 1 helped boost demand for domestic modules, along with government-aided schemes supporting demand for modules with domestic content requirement (DCR modules). Further, on December 9, the Union government imposed ALMM-II for solar cells.

Jatin Arya, Director, CareEdge Ratings, said the solar equipment manufacturing sector has several tailwinds including healthy domestic demand prospects, rising export opportunities, proactive policy support, and improved lenders’ appetite for RE projects. “However, lack of integrated solar equipment capacity, supply chain dependence on China, increasing competitive intensity, and delay in RE capacity additions due to systemic issues are some headwinds that remain monitorable over the medium term,” he said.

Green hydrogen

India's National Green Hydrogen Mission (NGHM) has made significant progress since its launch two years back, supported by policy initiatives and substantial financial aid.

Key milestones in 2024 include awarding 4.12 lakh tonnes per annum (LTPA) capacity to 10 companies for the production of green hydrogen with a total subsidy of Rs 3,055 crore. Another tender of 4.5 LTPA is currently live for green hydrogen production and one for 7.39 LTPA for green ammonia (for fertilisers), showed Ministry of New and Renewable Energy data accessed by Moneycontrol.

Also Read: Reliance, L&T, ReNew, Waaree bid for second round of green hydrogen incentives

Such tenders have drawn strong responses (bidders were in double digits) underscoring enthusiasm around the sector’s growth prospects.

Outlook for 2025

The government plans to issue more tenders for the production of green hydrogen and its derivatives in 2025, Union minister Pralhad Joshi told Moneycontrol.

Srivatsan Iyer, Global Chief Executive Officer, Hero Future Energies, said in 2025, modernising grid infrastructure, advancing energy storage solutions, and strengthening the domestic supply chain will be critical priorities. “By 2030, India will need around 38 GW of battery storage capacity to seamlessly integrate renewables into the grid, underscoring the need for significant investments in this space. Additionally, green hydrogen presents immense potential to decarbonsie industries and diversify renewable energy offerings,” he said.

Sehul Bhatt, Director- Research at CRISIL Market Intelligence and Analytics, said in FY26, about 22-23 GW of solar and 3-4 GW of wind capacities are expected to be added as healthy pipelines and favourable cost economics are likely to continue (for photovoltaic) at a global level.

He further said that more RE bids are likely with storage. Moneycontrol was the first to report on the Centre’s plan to make battery storage mandatory for upcoming RE projects. “As per market estimates, lithium-ion battery prices dropped 20 percent from $144/kWh in 2023 to $115/kWh in 2024. This led to increased incorporation in bids of adoption of the technology coupled with RE fuels, largely for peak power supply or load following supply applications. Removal of basic customs duty on critical minerals, such as lithium and cobalt has further cut costs of battery energy storage systems. In 2024, out of the 63 GW allocated for utility-scale RE projects, an estimated 12 GW was allocated for RE and storage projects,” Bhatt said.