The renewable energy (RE) sector has seen the emergence of a hierarchy among players over the years, with those consistently participating in allocations leading the pack. The initial decade of the sector’s growth, therefore, was also a period of stabilisation, establishing the successful players who grew with the sector.
That dynamic has, however, started changing in the almost-commoditised standalone solar vertical. Setting up solar farms with overflowing supply chains has become a quick target for a variety of entities looking to diversify. The established players, on their part, are actively looking to expand into, and are regularly featuring in, new project structures now requiring storage and complex configurations. Such project structures can be set up with storage or without (a solar-wind combination).
Hybrid models without storage saw a limited number of tenders till fiscal 2022, with around 90% of the tenders for such projects allocated in fiscals 2023 and 2024. Hybrids with storage followed a similar trend, with 90% of allocations occurring in the past two fiscals. However, the overall capacity allocated for hybrids with storage was only about a third of that allocated for hybrids without. The added complexity of integrating storage into hybrid projects requires thorough simulations to optimise the system and remain competitive, making it an even more niche market.
Looking at the unique count of players, the highest participation between fiscal 2022 and the first half of fiscal 2025 was in standalone solar, at 53 developers. Wind projects followed with 43 developers and hybrid projects with 30. Hybrid projects with storage saw the lowest participation, with 20 developers, as the project configuration is comparatively complex and capital intensive.
Figure: Projects allocated between FY22 and H1FY25
Source: Bridge to India – CRISIL MI&A Research
Note: Only the projects allocated by central or state entities through reverse auction are covered; solar does not include KUSUM or agriculture-based projects
New entrants from other industries have diversified into the standalone solar market, such as Refex, which originated in chemicals and pharma, and Kintech Synergy, which transitioned from transmission project development. Energytech Fuels and Essar, both in the petroleum industry, have also entered the space. However, in terms of scale, only 15 developers, including Avaada, Adani Green Energy, ReNew and SJVN, have secured project allocations exceeding 1,000 MW since fiscal 2022 to the first half of fiscal 2025.
The wind segment presents a different picture, with most developers, except for JSW Energy, securing allocations of less than 1,000 MW. Around 60% of the developers, which won allocations under the reverse auction for standalone wind projects, have managed to aggregate cumulative capacity of only up to 50 MW over the period.
The wind engineering, procurement and construction (EPC) and operations landscape has shifted, with original equipment manufacturers no longer dominating the space. Players like Adani Green and ReNew have undertaken these operations and expanded their portfolios. This development is crucial for the growth of the hybrid market as well.
In the hybrid segment, mature players from the solar and wind segments have secured most allocations. However, around one-fourth of the developers, such as Serentica Renewables and BrightNight, are only participating in hybrid bids with or without storage, leveraging their expertise in the market characterized by lower competition and high market demand for flexible RE solutions. While hybrids have seen significant allocations, hybrids with storage are still evolving owing to the complexity of flexible RE configurations resulting in high prices.
Player participation is also a factor of the market environment. Significant price volatility in the solar market in fiscals 2022 and 2023 resulted in project delays and cancellations. Many companies opted out of the competitive bidding process during this period. For instance, Torrent Power, a prominent power sector conglomerate, instead focused on expanding its portfolio through acquisitions. However, with the solar market now stable, Torrent has won projects totalling over 750 MW in 2024 alone, nearly tripling its portfolio.
The renewable energy market, therefore, has not only grown significantly in the past few years, but has also seen the competitive landscape evolve. Initially, players were competing to achieve scale, but the market is now slowly moving towards expertise and competitive advantages, with higher intensity in commoditised verticals. Higher participation and the increasing focus on expertise are both likely to drive the sector’s development.
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