India's Renewable Energy Sector to Witness 45 GW Surge by 2025: CareEdge ratings Report

14 Jul 2023 , 03:11 PM

India’s renewable energy sector is expected to experience a major expansion, with a projected increase of around 45 GW by fiscal year 2025, according to a report by CareEdge Ratings.

As per the CareEdge rating reports, The growth is driven by a robust pipeline of over 55 GW assets in development and an attractive bidding roadmap attracting developers to the sector.

Annual additions to renewable energy capacity are anticipated to range between 20 and 25 GW over the next two fiscal years. The one-year suspension of the Approved List of Module Manufacturers (ALMM) is a key catalyst for the surge in solar capacity, benefiting over 25 GW of untapped solar capacity where settled tariffs are below Rs. 2.5 per unit.

The extension of the ALMM suspension until March 2024 allows developers more flexibility in completing construction projects.

Solar module prices have witnessed a significant drop from 28-30 cents per watt to 21-22 cents per watt, facilitating the installation of renewable energy capacity across India.

The commissioning of domestic module manufacturing capacity exceeding 50 GW is projected to save approximately Rs 90,000 crore in foreign exchange annually and contribute to the Make in India initiative.

The government aims to establish 26.7 GW of storage capacity through pumped storage projects by fiscal year 2032, with an estimated capital expenditure of Rs 1.6 lakh crore and debt financing of approximately Rs 1.2 lakh crore.

As per reports, CareEdge Ratings acknowledges the government’s strong policy focus in driving renewable energy sector growth and its measures to address challenges faced by developers, such as the availability of domestic modules and high module prices.

Jatin Arya, associate director at CareEdge Ratings, highlights the positive bidding trajectory and the significant decrease in module prices, making the macro environment more favorable for developers.

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