India will reach 125 GW renewable capacity by December 2022

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India will reach a cumulative renewable energy capacity of 120-125 GW by December 2022. This will include 50% from solar, 38% wind and the balance from other sources—according to ICRA analysts.

The analysts expect utility-scale solar capacity to achieve the 60 GW target set by the government. Rooftop solar and wind power segments, on the other hand, will see a shortfall.

Sabyasachi Majumdar, Group Head & Senior Vice President-Corporate ratings, ICRA, said, “While [the 120-125 GW estimate] is lower than the capacity target of 175 GW set by the Government of India (GoI), the incremental capacity addition is estimated to be healthy at 33-38 GW with investment outlay of more than Rs 2 lakh crore over the next two-and-a-half years.”

ICRA expects this to be supported by a large pipeline of projects awarded by central nodal agencies and state distribution utilities (discoms) and likely improvement in execution timelines.

FY2021

ICRA expects RE capacity addition to remain subdued at about 8 GW in FY2021, given the continued execution challenges amid Covid-19, because of disruption of supply chain as well as labour availability issues.”

“7.5-8 GW RE estimate for FY 2021 will comprise 5-5.5 GW solar (mainly utility-scale) and about 2 GW of wind energy,” according to Girishkumar Kadam, Sector Head & Vice President – Corporate Ratings, ICRA.

Nonetheless, ICRA expects the overall medium- to long-term investment outlook for the renewable energy sector to remain strong supported by highly competitive tariffs, policy support and new schemes such as peak supply, round-the clock supply and RE plus thermal blending.

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