Annual addition to green energy capacity likely to surpass 35 GW: Report

New Delhi(The Uttam Hindu): The annual renewable energy installation capacity is likely to surpass 35 gigawatt over the next two years, primarily supported by a healthy pipeline of more than 100 gigawatt, according to a CareEdge Ratings report released on Wednesday. The accelerated growth in renewable energy (RE) over the last 12 months has been an outcome of the growing ESG (environmental, social and governance) focus of corporates, buoyant investor interest, proactive policy support, and enhanced availability of financing avenues. India installed 18.5 gigawatts of RE capacity in FY24, 21 per cent higher than the capacity added in the previous fiscal, it said.

Amid the rising demand, CareEdge Ratings believes that the solar equipment sector will witness a CapEx of close to Rs 1 lakh crore, with an estimated debt funding of nearly Rs 70,000 crore over the next three to five years. It says that the upcoming capacity of 50 gigawatts for cells and 80 gigawatts for modules necessitates a CapEx of Rs 32,000 crore and Rs 12,000 crore, respectively, coupled with the cumulative capex of Rs 55,000 crore, envisioned for 40 gigawatts of the wafer and nearly 25 gigawatts of polysilicon capacities awarded under PLI. The solar power segment remained the key driver of capacity addition in the RE sector, with significant capacity additions over the past 7-8 years, which increased its share in the RE capacity mix to 59 per cent as of September 2024, from 15 per cent as of March 2016. India boasts of nearly 70 gigawatts of module capacity and nearly 8 gigawatts of cell capacity as of March 2024, as against the annual average solar capacity additions of nearly 21 gigawatts on Direct Current (DC) basis witnessed over the last two years.

According to the report, the growth in solar capacity in the medium term will be driven by an annual tendering target of 50 gigawatts of RE capacity through renewable energy implementing agencies, the majority of which are expected from solar.  Sizeable capacity additions of about 20 gigawatts will be contributed through rooftop solar, hybrid solar components, and off-grid solar over the next 2-3 years. This apart, solar open access capacities of 4-5 gigawatts are likely to be added over 2-3 years, aided by ESG commitments of corporates and improving the economic viability of Commercial and industrial (C&I) projects.