India’s renewable energy sector has seen growth in recent years. Between 2020 and 2024, Gujarat and Rajasthan attracted more than half of the total investments in this sector. The cumulative investments reached nearly ₹4 lakh crore, denoting the increasing focus on sustainable energy sources.
Investment
Gujarat and Rajasthan together account for over one-third of India’s installed renewable energy capacity. Gujarat attracted investments of ₹1.17 lakh crore, making up almost one-third of total investments nationally. Rajasthan followed with ₹96,191 crore, contributing over 24 per cent. The combined efforts of these two states represent more than 53.5 per cent of the total investments in the renewable energy sector.
Installed Capacity
As of February 2025, Gujarat has an installed renewable energy capacity of 32,924 megawatts (MW). Rajasthan’s installed capacity stands at 33,468 MW. These figures underline the states’ roles as leaders in the renewable energy landscape.
Other Key States
Tamil Nadu ranks third in attracting investments, with ₹39,431 crore and an installed capacity of 24,635 MW. Maharashtra follows with ₹26,526 crore in investments and about 21,500 MW of capacity. Karnataka also plays a role with ₹23,104 crore in investments and a capacity of 23,075 MW.
Solar Power Dominance
Solar power has emerged as the most contributor to India’s renewable energy growth. Investments in solar energy reached around ₹2.64 lakh crore, accounting for approximately 66 per cent of total investments in the sector. The installed solar capacity has surged from 3.99 gigawatts (GW) in FY15 to 100 GW in FY25, marking a remarkable growth rate.
Future Projections
As of January 31, 2025, India’s total solar capacity stands at 100.33 GW. There are 84.10 GW under implementation and an additional 47.49 GW under tendering. In 2024, India achieved a record addition of 24.5 GW of solar capacity, more than doubling the installations from the previous year. This trend indicates a robust future for solar energy in India.
Factors for Investment
The investment in renewable energy is concentrated in states with high potential for solar, wind, and hydro energy. The top five states account for over one-third of total investments and hold more than 60 per cent of the installed capacity in the country. This strategic focus on states with abundant resources is essential for sustaining growth in the renewable energy sector.
Questions for UPSC:
- Estimate the impact of renewable energy investments on India’s economic growth.
- Critically discuss the role of state policies in promoting renewable energy sources in India.
- Analyse the significance of solar energy in India’s overall energy strategy.
- Examine the challenges faced by states in enhancing their renewable energy capacities.
Answer Hints:
1. Estimate the impact of renewable energy investments on India’s economic growth.
- Renewable energy investments contribute to job creation, boosting local economies and reducing unemployment rates.
- Investment in renewable energy enhances energy security, reducing dependence on fossil fuels and stabilizing energy prices.
- Increased renewable capacity attracts further investments and innovation, encouraging a green technology sector.
- Economic growth is supported through infrastructure development linked to renewable projects, enhancing overall productivity.
- Environmental benefits lead to reduced healthcare costs and improved public health, contributing to economic savings.
2. Critically discuss the role of state policies in promoting renewable energy sources in India.
- State policies provide financial incentives such as subsidies and tax breaks, encouraging investment in renewable projects.
- Regulatory frameworks set clear guidelines and targets for renewable energy adoption, driving state-level initiatives.
- Policies can facilitate land acquisition and streamline permitting processes, reducing barriers for renewable energy developers.
- States engage in public-private partnerships, leveraging private investments for large-scale renewable energy projects.
- Awareness campaigns and education initiatives help garner public support for renewable energy initiatives, enhancing policy effectiveness.
3. Analyse the significance of solar energy in India’s overall energy strategy.
- Solar energy accounts for over 60% of India’s total installed renewable capacity, denoting its central role in energy strategy.
- It offers a sustainable alternative to fossil fuels, aligning with India’s climate goals and international commitments.
- Technological advancements in solar energy have led to cost reductions, making it a viable energy source.
- Solar projects can be deployed rapidly and at various scales, from small rooftop installations to large solar farms.
- Investment in solar energy supports energy access in rural areas, contributing to inclusive economic development.
4. Examine the challenges faced by states in enhancing their renewable energy capacities.
- Inadequate infrastructure, such as transmission lines, limits the ability to harness and distribute renewable energy effectively.
- Regulatory hurdles and bureaucratic delays can slow down project approvals and implementation timelines.
- Land acquisition issues and community opposition can pose challenges to establishing renewable energy projects.
- Financial constraints and limited access to capital can hinder investments in renewable technologies and infrastructure.
- States may face technical challenges in integrating renewable energy into existing energy grids, requiring upgrades and innovations.
