India’s solar and wind energy sector demonstrated remarkable growth in 2024, fueled by government support, declining technology costs, and increased investor confidence.
Record capacity addition: India witnessed an unprecedented surge in solar energy installations in 2024. Between January to November, the country added 20.8 GW of solar capacity and 3.2 GW of wind capacity, ~87% YoY growth. India crossed the milestone of 200 GW of cumulative installed Renewable Energy Capacity in September, of which solar and wind contributed 43% and 24% respectively.
Module price falls further: China module prices dipped another 32% in 2024, reaching USD 8 cents/Wp. Massive capacity addition and supply glut continue to challenge the Chinese manufacturers as majority operate under losses. India’s manufacturers on the other hand were safeguarded with reimposition of ALMM from April 2024. With huge domestic demand but increasing module manufacturing capacity and falling component prices led to the domestic module prices dropping by 36% year-on-year to USD 14 cents/Wp at the end of the year.
Energy storage push: As per market estimates, lithium-ion battery prices dropped 20% 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 BCD on critical minerals such as lithium and cobalt further economized BESS. In year 2024, Out of 63 GW allocation of utility scale RE projects, 12.6 GW allocation was for RE coupled with storage projects.
Rooftop Surge: India added over 4 GW of rooftop solar capacity between January to November 2024. This remarkable growth was fueled by PM Surya Ghar Yojana. As of November 2024, around 2.6 million applications were submitted under the scheme and 0.6 million systems were installed, translating to around 1.8 GW capacity.
Figure: Monthly Solar and Wind capacity addition in 2024
Source: MNRE, CRISIL-Bridge To India Research
While the year observed record capacity addition, the sector continues to face some challenges, which need to be addressed to make the RE ecosystem more attractive.
Land and Connectivity Issue: The renewable energy sector is hindered by significant scalability challenges, primarily due to delays in the development of transmission infrastructure, which are often caused by right-of-way disputes and land availability issues. Furthermore, many of the most promising wind farm locations are currently occupied by outdated wind turbines, which require repowering to unlock their full potential.
Technology upgradation: While TOPCon cells are gaining prominence globally, India’s manufacturing sector still relies heavily on PERC technology, with half of its production capacity dedicated to it. However, with industry forecasts suggesting that PERC may become obsolete by 2027, Indian manufacturers need to consider upgrading to TOPCon technology, particularly since most of the production capacity for cell is now under planning.
Frequent policy changes: This leads to uncertainty and hinders the growth of the RE industry. While the government aims to notify policy changes in advance, recent actions have disrupted the sector. For instance, the imposition of anti-dumping duty on solar glass in December, following the introduction of custom duty in October, creates significant and sudden cost increase. This move, coupled with insufficient domestic capacity, will inevitably escalate project costs.
India’s renewable energy sector is poised for large scale growth in the coming years. The government’s commitment to clean energy, coupled with declining technology costs and increasing investor confidence, provides a strong foundation for the sector’s future development. By addressing the challenges and implementing effective solutions, India can strive to achieve its ambitious renewable energy targets as planned.
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