India’s transition to renewable energy is encountering significant obstacles, according to a new report by Zero Carbon Analytics, as the country strives to meet its ambitious target of 500 GW of non-fossil fuel capacity by the early 2030s. Although renewable energy investment reached USD 12.4 billion in 2023, it is far from the USD 200 billion needed to achieve this goal.
To stay on track, India needs to add 300 GW of new renewable capacity by 2030. However, recent additions are insufficient: between 2022 and 2023, only 13 GW was built, and from January to September 2024, an additional 20.7 GW was added, significantly below the 50 GW annual target. Meanwhile, India’s electricity demand surged by 7% in 2023, outpacing the global average, highlighting the pressing need for reliable energy solutions, particularly during evening peaks when demand is highest.
Battery storage has emerged as essential for India’s renewable goals. Recent storage auctions in Gujarat and SECI have driven costs down to $150 per kW, spurred by lower material costs and China’s production surplus. Analysts predict an additional 15-20% cost reduction by 2030, making storage an increasingly viable alternative to coal. If storage deployment is not accelerated, India risks relying on coal to meet rising demand, potentially leading to stranded assets.
India’s renewable transition also faces supply chain constraints, with heavy reliance on imported materials, particularly from China, which controls 80% of the global solar PV market. The report stresses the need for a domestic supply chain to reduce dependencies, recommending initiatives to recycle components for a sustainable production cycle.
Despite the challenges, India has an opportunity to establish itself as a renewable energy leader, particularly in Asia. As China expands its clean energy exports, India can position itself to play a significant role in renewable initiatives across the global south.