Renewable Energy Sector
Overview
Installed capacity: As of March 2023, India had 178.79 GW of installed renewable energy capacity, or 43% of all installed electricity capacity in the nation.
Solar power: With 64.38 GW of installed capacity, solar power is India's most popular renewable energy source. By 2030, the government wants to have installed 280 GW of solar energy.
With an installed capacity of 49.65 GW, wind is the second-largest renewable energy source in India. By 2030, the government wants to have installed 60 GW of wind energy.
The third-largest renewable energy source in India is hydropower, which has an installed capacity of 46.85 GW. By 2030, the government wants to generate 135 GW of hydropower.
The fourth-largest renewable energy source is biomass in India, with an installed capacity of 10.8 GW. The government has set a target of 10 GW of biomass by 2030.
India's renewable energy industry is expanding quickly due to government initiatives and falling prices. By 2030, the government wants to have 500 GW of renewable energy. Millions of employment are anticipated to be created by this goal, which would also lessen India's dependency on fossil fuels.
Key Facts
- Solar: India is the 3rd largest solar market in the world, after China and the United States.
- Wind: India is the 5th largest wind market in the world.
- Hydropower: India is the 10th largest hydropower market in the world.
- Solar rooftop: India has the largest solar rooftop program in the world, with over 4 GW of installed capacity.
- Offshore wind: India is one of the leading countries in the development of offshore wind energy.
Opportunities
Cost reductions: Renewable energy is now more affordable than fossil fuels thanks to recent cost reductions. The development of the renewable energy industry in India has been aided by this.
Government support: The Indian government has been a steadfast advocate for the renewable energy industry. It has introduced a number of measures, such as feed-in tariffs, renewable purchasing commitments, and tax exemptions, to encourage the growth of renewable energy.
India is a sizable and expanding market for renewable energy. The nation is home to more than 1.3 billion people, and its economy is expanding quickly. This expands the potential market for renewable energy significantly.
India's workforce is competent and knowledgeable about renewable energy technology. This can help to attract investment and development in the sector.
Challenges:
High upfront costs: Renewable energy projects still have relatively high upfront costs, which can make it challenging for developers to find funding.
Grid integration: Because it necessitates infrastructure changes, integrating significant volumes of renewable energy into the grid can be difficult.
Renewable energy sources like the sun and wind are intermittent, which implies that power is not always produced by them. This can make it challenging to maintain the grid's balance and a steady flow of power.
Land availability: Renewable energy projects need a lot of land, which might be difficult in India because there is a shortage of available land.
Technology issues: Renewable energy technologies are still developing, thus a few issues need to be solved, including the efficiency of solar panels and the storage of wind and solar energy.
Analysis
|
Year |
Revenue (in INR crores) |
Revenue growth (%) |
Operating margin (%) |
|
2020-21 |
1,14,649 |
19.6 |
15.6 |
|
2021-22 |
1,39,745 |
22.4 |
16.2 |
|
2022-23 (Estimated) |
1,67,500 |
20.3 |
16.8 |
income Growth: Over the years, India's renewable energy industry has consistently increased its income. The revenue was INR 1,14,649 crores in 2020–21, and it climbed by 19.6% in 2021–22 to INR 1,39,745 crores. A further rise of 20.3% is projected to bring in INR 1,67,500 crores in revenue during 2022–23.
Revenue Growth Rate: In this industry, the revenue growth rate has been favourable and largely consistent. The revenue growth rate from 2020–2021 to 2021–2022 was 22.4%, suggesting a considerable rise. The sector is expected to continue growing, as indicated by the predicted 20.3% revenue growth rate for 2022–2023.
Operating Margin: The operating margin has also been steadily rising, a sign of the industry's profitability. The operating margin increased to 15.6% in 2020–21 from 15.6% in 2019–2020 which improved to 16.2% in 2021-22. The estimated operating margin for 2022-23 is 16.8%, reflecting a further improve revenue Growth.
Overall, the Indian market for renewable energy has shown favourable revenue development, with rising revenues and consistent growth rates. Over time, the operating margin has also increased, a sign of higher profitability. These developments point to a promising future for the industry, which is expected to expand and help India meet its targets for renewable energy.
Long-Term View: The outlook for India's renewable energy industry over the long run is highly favourable. The 500 GW renewable energy goal set by the Indian government for 2030 is probably going to be exceeded. Numerous elements will influence the field of renewable energy's growth.
The development of the renewable energy sector in India will also be influenced by technological advancements in addition to these considerations. New and more effective technologies are always being created, and renewable energy technologies are continually changing. As a result, renewable energy will become even more affordable and competitive with fossil fuels.
Overall, the long-term outlook for India's renewable energy industry is highly promising. The sector is expected to grow rapidly in the coming years, and it is likely to play a major role in the country's energy mix.
ROSHAN PATEL
Disclaimer:
The following Report is intended for informational purposes only and should not be construed as financial advice or investment recommendations. It is important to conduct thorough research and consult with a qualified financial advisor or professional before making any investment decisions.