In the fiscal year 2024, India significantly increased its tender capacity for utility-scale renewables to 69.8GW, with solar PV accounting for 48% of this capacity.

Out of the total capacity tendered between April 1, 2023, and March 31, 2024, which amounted to nearly 70GW, 40GW were eventually awarded contracts, according to a report jointly published by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics. This represents a substantial increase compared to the previous fiscal year (FY23), during which only 10GW of capacity were awarded. Additionally, the tendered capacity in FY24 exceeded the government's target of 50GW. It is anticipated that tenders in FY25 will once again surpass the 50GW threshold set by the government, with awarded capacity continuing to rise.

Despite a 57% decrease in module prices over the past two years, solar tariffs have marginally increased by nearly 8.5%, reaching an average of INR2.5.26/kWh (US$0.027-0.0287/kWh), as reported.

The Solar Energy Corporation of India (SECI), an Indian utility, accounted for a quarter of the total renewable capacity tendered, underscoring the significant role of state-level tendering authorities in the deployment of utility-scale renewables.

Since the introduction of hybrid tenders in 2018, the share of solar-wind hybrid projects has risen from 16% in FY20 to 43% in FY24. Standalone solar projects constituted nearly half of all capacity tendered during FY24.

According to Vibhuti Garg, Director – South Asia at IEEFA and contributing author of the report, there is substantial investor interest in India's utility-scale renewable energy market, driven by factors such as the country's potential for market growth, government targets, and regulatory support.

However, challenges persist in the execution of tenders. Key among them are the 40% import duties on solar modules imposed with the basic customs duty in April 2022 and the requirement to procure domestically manufactured components through the Approved List of Models and Manufacturers (ALMM). The ALMM was recently reinstated after a one-year moratorium due to insufficient supply of domestic components.

As of April 2024, India had annual nameplate capacities of 68GW for modules and 8GW for cells. However, actual production capacity is significantly lower, with only 17GW of module shipments in 2023 by Indian manufacturers.

Additionally, over the past few years, more than 10 new developers have entered the Indian utility-scale market, including US-based independent power producer BrightNight, which partnered with energy platform ACEN Corporation to accelerate the development of its 1.2GW renewables portfolio in India.