Bigger & Faster – South India’s Renewable Comeback

South India, which heralded some of the earliest large-scale solar and wind projects in the country, is now further expanding its clean energy footprint. Again, one could say that some of India’s most notable renewable achievements came from the region before 2020. From the then-largest solar plant at Kamuthi in Tamil Nadu with a 648 MW capacity to the huge lead in wind energy capacity, the southern states showed the way before the North woke up post-2020.

In manufacturing, besides the natural geographical advantage of coastlines, ports and export infrastructure, state governments have been especially active in attracting manufacturing to their states.

The additions of a few of India’s largest solar parks like Pavagada in Karnataka, Kurnool Ultra Mega Solar Park (Andhra), besides the growth of wind energy projects in the region, have led to further progression on the green energy front.

Data from the Ministry of New and Renewable Energy (MNRE) suggests that four southern states feature among India’s largest states in terms of renewable energy capacity (including large hydro). Among the southern states, Tamil Nadu is the leader with significant potential ahead. Consider how its 11 GW of wind installations could be easily ramped up if a clear wind repowering policy works to augment the oldest wind turbines.

The latest data from the Central Electricity Authority (CEA) indicates that Tamil Nadu has the largest renewable installed capacity (excluding large hydro) of 23 GW. It is followed by Karnataka (20.23 GW), Andhra Pradesh (10.50 GW), Telangana (5.2 GW) and Kerala (1.88 GW). If anything, states like Tamil Nadu and Karnataka were actually forced to go slow on additions as they found themselves with ‘too much’ green energy. Plus, adding a lot of it at a time when high-priced feed-in tariffs were the norm meant that state discoms found it tough as well. Now, with energy demand finally creating enough space as well as lower prices, the states are ready for a second, sustained period of renewable energy additions.

The Renewable Purchase Obligation (RPO) compliance of these states often indicates the robust performance of these states. All of these states have ensured the purchase of green energy above their RPO levels. State-wise RPO compliance data furnished before the Lok Sabha on August 1, 2023, claimed that the majority of the southern states outperformed in RPO.

The leader, however, was Karnataka. While all southern states had an RPO target for 2022-23 of 24.61%, Karnataka actually had its total RPO of 46.7%. Others on the list included Kerala (36.3%), Andhra Pradesh (28.5%), Tamil Nadu (25.5%), and Telangana at 20.2%.

 “The growth of renewable energy in these states can be attributed to the clear, ambitious targets outlined in their state policies. Take, for instance, Andhra Pradesh—its latest renewable energy policy envisions increasing its clean energy capacity to 160 GW. This target isn’t vague; it includes segmental goals for solar, wind, pumped storage projects (PSPs), etc. These specifics give developers a clear pathway for investment, paving the way for large-scale solar and wind projects,” said Jaideep Saraswat, Associate Director (Clean Energy) at Vasudha Foundation, a New Delhi-based think tank, to Saur Energy.

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Clean Energy Targets Of States

Andhra Pradesh is not alone. Karnataka has targeted adding 10 GW to its clean energy basket by 2027. Tamil Nadu, on the other hand, has planned 20 GW of solar capacity alone by 2030, and Kerala has planned to go 100% renewable by 2040, much before India’s own net-zero goal of 2070.  On the other hand, Telangana has planned 20 GW of renewable energy capacity by 2030.

Damian Miller, CEO of Orb Energy, a Karnataka-based company, told Saur Energy that the pro-solar policies and initiatives of states like Karnataka have further helped the state to increase its green capacities.  “Karnataka’s pro-solar and pro-renewable policies have helped the state to shine nationally and led to the expansion of green energy in the state. Karnataka does not levy heavy charges in cases like rooftop solar, it allows net metering upto the sanctioned capacity of the C&I consumers. This has allowed the state to reach new heights.”

Jaideep from Vasudha Foundation said adopting open access policies in Southern India was also faster. He said that after the Ministry of Power issued its Green Energy Open Access norms, several southern states framed their state rules on open access policies to allow the use of open access for the renewable power generators and their offtaking by several outlets interested in procuring green power.

Karnataka was one of the early adopters of clean energy. It hosts one of India’s largest solar parks, the Pavagada Solar Park in the Tumkur district with above 2 GW, which has also been cited as a model for local community involvement and benefits sharing.

Experts from Karnataka-based energy think tank CSTEP said that several policies from the state led to this.

“Karnataka was one of the first states to introduce a dedicated renewable energy policy in 2009 and exceeded its solar target of 6 GW by 2021 under the Karnataka Solar Policy 2014-21. Another unique aspect is Karnataka’s focus on integrating renewables into its power system,” Saptak Ghosh, Sector Head (REC) at the Center For Study of Science, Technology and Policy (CSTEP).

He also added, “The state has achieved a high share of variable renewable energy (VRE), with solar and wind energy together meeting more than 30% of annual generation.

This integration is supported by a robust infrastructure and innovative solutions like blockchain-based platforms for peer-to-peer trading of RTS generation that have been adopted by the state. It is also advancing green hydrogen initiatives and exploring pumped-hydro energy storage projects to enhance grid flexibility and storage capabilities.”

Open Access Connections

A November 2024 report by the Institute of Energy Economics and Financial Analysis (IEEFA) also cited the examples of states like Andhra from the south in building a robust framework on Green Energy Open Access.

“Some states with high renewable energy potential, such as Andhra Pradesh, are beginning to recognise the benefits of GEOA. The Andhra Pradesh Integrated Clean Energy Policy (2024) has introduced a much-needed regulatory framework for green open-access projects. Other states with untapped open access potential could likewise boost green open access adoption by implementing comprehensive policies,” the IEEFA report said.

However, there are still many challenges that are curtailing the growth of green energy in the region. Krishan from WRI added, “System-related challenges include ensuring adequate transmission infrastructure, improving the visibility of various generation sources, and enhancing the ability to forecast upcoming generation. Additionally, many prime sites have already been allocated to lower-capacity assets, highlighting the need to prioritize repowering. Energy storage capacities—both Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSP)—remain limited. Lastly, the slow adoption of rooftop solar continues to be a significant hurdle in parts of South India.”

Perhaps more importantly, as a more developed part of the country today, land availability has emerged as a major issue, especially for smaller states like Kerala and Telangana. Developers can frequently find themselves competing with actual industry in many cases, where the latter will always win, considering the higher job creation they offer. These states are pushing hard for rooftop solar, therefore, and results should be visible from 2025 onwards.

The Rise of Solar Manufacturing In South India

South India’s early lead can also be attributed to some of the key solar manufacturers in India–Premier Energies and Emmvee Photovoltaics are based there. These firms were among the early adopters of the new advanced manufacturing technology. Lately, several companies that forayed into solar cell manufacturing or are planning to do so picked southern states like Tamil Nadu, Karnataka, Telangana, and Andhra Pradesh for manufacturing, even as Odisha in the East has made a strong dash as well in 2024 by learning from the Southern playbook of targeted incentives.  The existing base has helped, no doubt, as trained or skilled manpower is a vital need for the emerging sector.

For example-Vikram Solar, which had its existing module manufacturing plant at Falta in West Bengal, has planned its new 3 GW solar cell and 6 GW module units at Tirunelveli in Tamil Nadu. Premier Energies, which was already into solar cell production, has proposed a fresh TOPCOn solar cell manufacturing unit in the Rangareddy district in Telangana. Moreover, TP (Tata Power) recently started its biggest solar cell manufacturing plant in Tamil Nadu with a capacity of 4.3 GW.

On the other hand, a total of nine solar module manufacturers have preferred South India as their manufacturing destination. These include Tata Power, Swelect Energy Systems, First Solar, RenewSys, Emmvee Photovoltaic, Premier Energies, Vikram Solar, Shirdi Sai Electricals and Orb Energy. The plans of Shirdi Sai are particularly interesting as the firm has been selected for the government’s PLI scheme for manufacturing to make the complete solar chain starting from polysilicon to modules.

The proximity to ports, including some of India’s largest ports like Vishakhapatnam and Paradip, have also made these destinations a hotbed for the export of modules to Southeast Asia, Europe and the United States (US).

Why South For Manufacturing?

Emmvee Photovoltaics, which has its module and cell manufacturing units in Bangalore in Karnataka, said that the strategic location aids in better management of their business.

“Proximity to ports both in the eastern and western parts of the country has never been a concern because of our location, which helps in exports as well as imports. The robust connectivity of road, rail and air transport is an important advantage to service all customers throughout the country. To reiterate the importance of talent in this industry for growth, technological advancements and producing quality products, Bangalore has been a great place,” Suhas Donthi, Group CEO of Emmvee Group, told Saur Energy.

Vikram Solar, in its Draft Red Herring Prospectus (DRHP), explains why choosing Tamil Nadu for its proposed manufacturing plant could cut down on its logistics and ease its trading.

“Locating manufacturing units near these ports ensures efficient logistics, reducing shipping costs and delivery times. For players like Vikram Solar Limited and Mundra Solar PV Limited (Adani Solar), it is advantageous to export solar PV modules to international markets, making them competitive on the global stage. Setting up manufacturing units in states such as Gujarat, Karnataka, having higher solar potential aligns with the local solar energy demand, providing a ready market for solar modules and components,” it said.

It also added, “Tamil Nadu is also well connected logistically to the entire south India to cover the domestic market. This proximity to solar power projects can streamline the supply chain, reduce logistical complexities, and promote faster deployment of solar installations.”

Several states in South India now give their hand-holding support for solar module manufacturing industries. For example, Tamil Nadu can support solar manufacturing units through capital subsidy, electricity tax exemption, interest subsidy, training subsidy and a 50% stamp duty exemption, among others, under its Electronic Hardware Manufacturing Policy.

In Telangana, the state has passed the Telangana Industrial Project Approval and Self- Certification System (TG-iPASS) Act, which allows the issuance of various clearances at a single point. This act empowers the companies to exercise their right to know the reasons for delay, if any, for the grant of approval, besides enabling penalties to officers concerned for such delays.

However, it is something basic, like dependable and high-quality electricity supply, that can also tilt the scales, since solar manufacturing, especially cell and further backward integration, requires high power availability.  States that offer exemptions on electricity duties or other benefits on consumption can be more attractive from an operational cost perspective,” said a founder of a solar manufacturing firm, requesting anonymity.

Avinash Hiranandani, MD of RenewSys, told Saur Energy that they entered South India in 2015 after acquiring a solar company called Solar Semiconductors, which had its assets in Hyderabad. He said that the proximity of its solar module manufacturing to airports and domestic road connections, besides the robust infrastructure in Telangana, aided in the growth of the company.

Premier Energies, in its Red Herring Prospectus (RHP), stated that it had received ₹338.64 million in subsidies from the Telangana government for its solar manufacturing operations as of June 2024. This was in addition to central subsidies received under the M-SIPS (Modified Special Incentive Package Scheme) and SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors) schemes of the Union government.

Emmvee’s CEO said that he also foresees a brighter future for South India in solar manufacturing, including the commissioning of more backward-integrated solar firms.

“The southern states have a strong industrial ecosystem, excellent power infrastructure, and access to ports, making them natural contenders for scaling solar manufacturing. As India looks to become a global hub for solar manufacturing and diversify its geographic spread, I believe we will see a significant rise in investments across these states—not just in module assembly but also in cell, wafer, and ancillary manufacturing.  We are also expanding with another 2 GW addition through a new manufacturing unit at Sulibele soon. However, what would be interesting to see is how manufacturers back their moves with a clear understanding of technology evolution, Capex cycles, and global demand trends,” Suhas added.

Green Projects On The Rise

As per the latest statistics from the Central Electricity Authority (CEA), the five states from south- Karanataka, Andhra Pradesh, Kerala, Telangana and Tamil Nadu have a cumulative capacity of 59 GW, which is around 35% of India’s total renewable installed capacity. This is against the cumulative capacity of 14.93 GW, which South India had till March 2014, indicating a jump of 295% in terms of renewable capacity additions in the last 11 years. This figure could easily double in the next 5 again.

Experts said that many southern Indian states were also some of the earliest adopters of green energy, which aided in scripting a success story. “These states have been early adopters due to different circumstances and have developed policies to grow the sector – first from a power deficit management strategy to now looking at how they can form an integral part of the mix + also help grow the industrial base in the state (RE manufacturing). It also helps that they have been manufacturing hubs for other industries and a lot of the infrastructure was already there. Given that these states also contribute to India’s coastline, offshore wind will also be part of the mix,’ Deepak Krishnan, Deputy Director (Energy Programme) at WRI-India told Saur Energy.

Conclusion

While growth in the South can safely be taken for granted, considering the huge strides the region has made economically, issues remain or are emerging that could slow down the change. The lack of robust transmission lines in the region, cases of imposition of charges on solar generation in rooftop solar connections (in Tamil Nadu), land and acquisition issues are still issues that will not go away easily.

In February, India’s Chief Economic Advisor (CEA), Anantha Nageswaran, while speaking at an event, pointed out that with a 6.3% GDP growth rate compared to 5% in the rest of India, South India leads in economic progress and far outperforms other regions of India.

Tamil Nadu contributes 20.4% to South India’s manufacturing GDP, with automotive, textile and electronics manufacturing being the thrust areas of the state. States like Telangana and Andhra Pradesh also lead in female participation in the workforce, a dependable marker of sustainable growth. It is clear that the rest of India, which played catch-up and even took the lead in wind energy (Gujarat from Tamil Nadu in 2023), has a lot to learn from the South. Lessons learnt well will serve the whole country extremely well.