India to add 20 GW of renewable energy capacity in FY2024, says ICRA

ICRA expects the RE capacity addition in India to rebound to 20 GW in FY2024 from 15 GW in FY2023. This will include 16 GW from solar, 2 GW from wind and another 2 GW from hybrid projects.

ICRA says the time extension provided by the Ministry of Power for solar and hybrid projects till March 2024, the relaxation of the ALMM requirement, and the likely moderation in the solar PV cell and module prices, as seen recently, will drive the capacity addition this fiscal.

Vikram V, vice president & sector head – corporate ratings, ICRA, said, “The solar power segment witnessed a slowdown in bidding activity in FY2023 amid elevated module prices, challenges associated with the ALMM, and the imposition of duties on imported modules. While there is visibility on RE capacity addition in the near term, a significant scale-up in tendering activity is required to meet the notified renewable purchase obligation (RPO) targets over the medium term.”

While concerns remain on execution risks and input cost pressure for the RE projects, ICRA’s outlook for the RE sector remains Stable, led by strong policy support, healthy demand prospects, and superior tariff competitiveness. Further, the realization of overdues and regular payment of ongoing bills by discoms following the Late Payment Surcharge scheme is a positive for the sector.