India's Renewable Energy Capacity to Reach 359 GW by FY25-30
In light of geopolitical factors emphasizing the importance of energy security, Jefferies anticipates that India's renewable energy capacity will reach 359 GW by the fiscal years 2025-2030.
This forecast coincides with the nation bracing for a substantial resurgence in power consumption after a period of sluggish expansion.
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The report predicts that there will be a six percent increase in power demand in FY27, fueled by the return to normal industrial operations and certain climate conditions.
The anticipated 2026 monsoon season is expected to boost national power consumption significantly.
According to predictions from the International Research Institute for Climate and Society, Jeffeires highlights a 60 percent likelihood of an El Nino occurrence between June and September. These climatic conditions are commonly associated with a significant increase in energy demands within both residential and agricultural industries.
Jefferies report indicates that decreased rainfall levels usually lead to an increase in electricity consumption from both residential and agricultural sectors, which account for 40-45 percent of India's total power demand. This is attributed to higher usage of cooling products in households and a rise in the utilization of irrigation/pumping equipment in agriculture.
The government is still prioritizing the shift to sustainable energy sources, but is also enhancing thermal capacity to ensure a balanced energy mix.
There are current strategies in place to increase thermal capacity by 97 GW by 2034-35, a significant increase from the 247 GW reported at the end of FY25.
Government mandates and decentralized subsidy programs are actively promoting the growth of domestic solar manufacturing. The PM Suryaghar rooftop solar initiative successfully oversaw the installation of around 9 GW of capacity in FY26, while the PM Kusum agri-pump scheme contributed an additional 7.5 GW to the industry.
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Government support for Domestic Content Requirement (DCR) cells has led to an increase in their usage, accounting for approximately 30 percent of India's solar installations annually. The implementation of DCR schemes has fueled demand for photovoltaic (PV) technology, with a focus on domestic production of ingots and wafers to ensure vertical integration.
The capital expenditure needed for establishing cell capacity is estimated at around US$70 million per gigawatt (GW), with a similar cost for ingots and wafers production, as stated in the report.
An official requirement by the government to utilize domestically produced ingots and wafers, set to begin in June 2028, signifies a strategic progression towards complete backward integration within the solar industry's supply chain.
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This modification in policy is expected to particularly favor companies possessing strong financial standings capable of handling the significant capital requirements associated with such endeavors.
Presently, a scarcity of domestic cells enables pioneers in the manufacturing sector to sustain impressive levels of profitability.