Key Findings
Investment in renewable energy in India reached a record US$14.5 billion in the last financial year (FY2021-22).
Investment in renewables increased by 125% compared to FY2020-21 and 72% over pre-pandemic FY2019-20.
The surge in investment comes on the back of the revival of electricity demand after the COVID-19 slump and commitments by financial institutions to exit fossil fuels.
Investment will have to more than double to US$30-US$40 billion annually for India to reach its target of 450GW of renewable energy capacity by 2030.
Executive Summary
Investment in electricity generation in India has rebounded from its slump during the COVID-19 pandemic, with 15.5 gigawatts (GW) of renewable energy capacity – representing an investment of a record US$14.5 billion – added in the past financial year.
The majority of the money flowed through acquisitions, which accounted for 42% of the total investment in FY2021/22. Most of the other biggest deals were packaged as bonds, debt, equity investment and mezzanine funding.
The largest deal was SB Energy’s exit from the Indian renewables sector in October 2021 with a sale of assets worth US$3.5 billion. Other key deals included Reliance New Energy Solar’s acquisition of REC Solar holding assets and a host of companies such as Vector Green, Adani Green, ReNew Power, Indian Railway Finance Corporation, Azure Power raising money in the bonds market.
The investment in FY2021/22 is an increase of 125% over FY2020/21 and 72% over pre-pandemic FY2019/20. However, investment in renewables would need to more than double to about US$30-40 billion per year for India to reach its target of 450GW of renewable energy capacity by 2030.
In an environment of high economic growth, increasing energy demand will necessitate rapid growth in renewable energy capacity addition.
This will require investment in an entire “ecosystem” to help states accelerate adoption of renewable energy, including flexible generation like battery storage and pumped hydro; expansion of transmission and distribution networks; modernisation and digitalisation of the grid; domestic manufacturing of solar modules, cells, wafers and electrolysers; promotion of electric vehicles; and more deployment of decentralised renewable energy like rooftop solar.
