India is witnessing a transformative shift in its energy landscape, with renewable energy capacity surpassing 179.5 GW, propelling the nation to the fourth position globally in both wind and solar power. This substantial growth is not only transforming homes and industries but also influencing stock markets and aligning with India’s ambitious climate objectives, as highlighted in the REN21 Renewables 2022 Global Status Report.
Devansh Jain, Chair of the Renewable Energy Committee at PHDCCI, reported a surge in solar module imports during the initial six months of FY24, reaching a substantial $1,136.28 million. This surpasses the total PV panel imports for the entire FY23, marking a significant uptick in solar technology adoption.
The Indian government has set ambitious targets of achieving 500 GW of non-fossil energy by 2030 and reaching net-zero carbon emissions by 2070. A flurry of policy activities in 2023, including structured annual auctions for 50 GW of renewable capacity, clear roadmaps for Renewable Purchase Obligations (RPOs), and streamlined pricing through a Uniform Renewable Energy Tariff, sets the stage for accelerated growth, as outlined in an InvestIndia.gov report.
As of November 2023, India’s renewable capacity exceeded 180 GW, with solar leading at 72 GW, wind at 45 GW, and large hydro at 47 GW, constituting over 40% of the total installed capacity.
Performance of India’s Renewable Energy Stocks in 2023
In 2023, the radiance of solar panels extended beyond rooftops, reflecting on Indian stock market charts. Renewable energy stocks experienced significant growth, driven by government targets, cost reductions, and positive investor sentiment.
Sunny Agrawal, Head of Fundamental Equity Research at SBI Securities Ltd., reported remarkable returns ranging from 100-270% for companies such as REC, PFC, Waaree Renewables, and Gensol during CY23. The sector’s stellar performance positions renewable energy stocks as strong contenders for investment in 2024.
Outlook for 2024: Continued Growth and Potential Returns
After a robust 2023, renewable energy companies spanning wind, solar, hydrogen, hydro, and ethanol are poised for sustained growth and healthy returns in 2024. Agrawal suggests that the entire value chain related to the renewable energy sector, including engineering companies, solar panel manufacturers, infrastructure players, and financial institutions, is likely to benefit from robust capacity additions over the next 2-5 years.
India is anticipated to witness 25 GW of renewable energy capacity addition in 2024, with an estimated investment of ₹137,500 crore (about USD 16.5 billion), surpassing the 13.5 GW seen in 2023.
Solar energy will continue to dominate, with wind power making a comeback, and green hydrogen gaining prominence through the Green Hydrogen Mission. Policy continuity at both central and state levels, coupled with infrastructure enhancements and local manufacturing incentives, positions India as a global leader in renewable energy.
Driving Forces in 2023: Policy Initiatives and Holistic Approaches
Key policy initiatives in 2023 set the tone for India’s renewable energy sector, including structured bidding for 50 GW annually, Renewable Purchase Obligation trajectories until 2030, and the introduction of a Uniform Renewable Energy Tariff. The establishment of Ultra Mega Renewable Energy Parks, infrastructure enhancements, and state-level policies in Gujarat and Rajasthan underscored a comprehensive strategy to drive growth and global competitiveness.
Devansh Jain highlighted ongoing efforts to lower installation costs through technological advancements, such as higher wattage solar panels and megawattage wind turbines, promoting self-reliance across the supply chain.
The journey of India’s renewable energy sector in 2023 reflects a commitment to sustainability, innovation, and global leadership, laying a strong foundation for a greener and more resilient future.
Source: MINT