Renewable sector poised for third consecutive year of record capacity addition

In a boost for the country’s renewable energy ambitions, the sector is on track to achieve a record capacity addition for the third consecutive year. 

Primarily driven by solar energy, the fiscal year ending March 31, 2025, is set to witness the highest-ever renewable energy capacity addition with new additions expected to surpass 25 GW — a 35 per cent increase from FY24.

In the first 11 months of this fiscal year, 24 GW of new renewable capacity has already been added to the grid, significantly surpassing the 18.5 GW recorded in FY24 and 15.3 GW in FY23, according to Union Ministry of New & Renewable Energy data. For the third straight year, the sector has outperformed previous records.

Between April 2024 and February 2025, the solar sector contributed nearly 21 GW of new capacity (including ground-mounted, rooftop, hybrid and off-grid solar) compared with 15 GW in FY24 and 12.8 GW in FY23.

Meanwhile, the wind sector has added 2.7 GW in the current fiscal year against 3.3 GW in FY24 and 2.3 GW in FY23. Also, biomass, small hydro, waste-to-power, and waste-to-energy (off-grid) contributed 388 MW, 97 MW, 60 MW, and 66 MW, respectively, this fiscal.

Solar hits peak

As of February 2025, India’s cumulative renewable energy capacity had reached 168 GW, with solar accounting for 103 GW. This includes 78.47 GW (76.5 per cent) from ground-mounted solar, 16.66 GW (16.2 per cent) from rooftop solar, 2.85 GW (2.8 per cent) from hybrid projects and 4.59 GW (4.5 per cent) from off-grid solar.

As of last month, the wind power sector’s cumulative capacity stood at 49 GW, while the total installed capacity for biomass reached 1.7 GW. When large hydro projects are included, the country’s overall renewable energy capacity stood at about 215 GW as of last month.

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“Solar capacity additions have reached record highs, demonstrating resilience amid evolving demand. Deployment is expected to accelerate further, with 85-90 GW anticipated in FY26-27, primarily driven by residential rooftop solar. Growth hinges on addressing the PPA-PSA (Power Purchase Agreement–Power Supply Agreement) gap, timely completion of PM-SGMBY (PM Surya Ghar Muft Bijli Yojana) by FY28, and stricter RPO compliance,” according to analysts at SBI Capital Markets.

In calendar year 2024, India saw record issuance of 73 GW in utility-scale renewable energy tenders, surpassing the government’s 50 GW annual target for the second year in a row. Notably, nearly half of these tenders involved wind-solar hybrids and battery energy storage.

Despite the record volume of tenders, post-bidding challenges have intensified. A total of 8.5 GW of tenders went undersubscribed — five times more than in 2023 — due to complex bidding structures, aggressive pricing strategies, and transmission infrastructure bottlenecks. Additionally, 40 GW of power sale agreements remain unsigned, raising concerns over project execution, according to a recent report by the Institute for Energy Economics and Financial Analysis and JMK Research & Analytics.