The 10 Big Milestones That Will Define India’s RE Sector In 2025

The Indian renewable energy market witnessed several historic events in 2024. These include policy changes, diversified and copious tenders, a record pace of green project installations, bulging order books across manufacturers, EPCs and more. While the overarching focus of the year was to be self-reliant in manufacturing, with real progress finally visible, China still cast a long shadow, thanks to the low prices there which enabled much progress in India as well with low input costs.

Rooftop Solar Shows Potential, Finally

Early on in 2024, a much-neglected sector got a boost. Rooftop Solar. Prime Minister Narendra Modi launched the PM Surya Ghar scheme with a Rs 75,000 crore promised outlay to cover a targeted 10 million households. The PM’s imprimatur meant much wider awareness and a focused plan to enable numbers. And no one was disappointed as both applications, and towards the end of the year, installations, surged. With installations surging towards 500,000 by year-end, and almost 2 GW of capacity added, residential rooftop solar has grown by over 50% in just a year.

Another landmark event was the reimposition of an Approved List of Models and Manufacturers (ALMM) for solar modules from April 1. This finally served notice to Chinese solar module companies in India about the end of easy pickings in the Indian market. It was because ALMM norms mandate the use of only domestically produced solar modules for government or government-sponsored projects, shutting out almost 95% of the market to them. The addition of DCR (Domestic Content Requirement) cells only tightened the funnel further.

On the other hand, Union Finance Minister Nirmala Sitharaman during her budget announced imposing Customs Duty on Solar Glass. Towards the end of the year, anti-dumping duties were also imposed on solar glass to prevent the intrusion of ultra-cheap solar glass into India from countries like China and Vietnam.

In another turn of events, the Ministry of New and Renewable Energy (MMRE) also talked about bringing in an Approved List of Models and Manufacturers (ALMM) for solar cells from June 2026. This was an audacious move for a country like India which is still highly reliant on Chinese solar cells for its module manufacturing business. With a limited capacity of around 8 GW till November, the announcement has seen industry players rush to accelerate their own plans to make in India, even as others who are closer to commissioning look ahead to a great start.

In terms of tendering, 2024 witnessed several interesting tenders setting a new precedence. Notably, with an almost 25% share, Hybrid, RTC or FDRE tenders, or even pure energy storage tenders finally emerged on the scene in a big way. While just 178 MWh of BESS projects were

during the year, 29 GWh worth of ESS capacity moved to the execution phase while 18 projects of a total of 21.1 GWh capacity were awarded.

Only 3 projects of the 32 tendered during the year were cancelled. The Solar Energy Corporation of India (SECI) discovered its lowest tariff of Rs 3.41 for its 1200 MW of solar+storage projects in July this year. This price was the lowest price discovered then.

All that leads us to the biggest risk of the year. Our 10 predictions for 2025. We will look forward to revisiting these next year. Until then, feel free to disagree, and share your feedback as well!

1. Solar module prices 

After a year (2024) that couldn’t have gone better, solar module prices, the biggest component in a solar project, could finally start rising again. That would be bad news for many, especially if the increase crosses 7-10%, as upto that level, an expected drop in interest rates plus higher efficiencies will make up for the rise. We have already seen the price at one of the last declared tender results of the year from NTPC inch upto Rs 2.59/kWh, in a year when breaching the Rs 2.50 mark has become a rarity. Prices in India have been divorced from global rates for some time now, thanks to the triple whammy of import duties, the ALMM order, and finally, DCR cell requirements. Despite these, developers and consumers found the prices tolerable, thanks to the unprecedented crash in Chinese input materials, from wafers to cells. That could change in 2025.

One reason is the reduced tax rebate from the Chinese government for the Chinese exporters of solar cells and modules. This tax rebate has been cut down from 13 percent to 9 percent, reducing the margins for solar cell exports destined for India. The exporters are most likely to compensate for it by increasing their cell prices.

Second, is the imposition of customs duty and anti-dumping duties against imports of Chinese and Vietnamese solar glass. The solar glass makers from these firms were earlier accused of dumping ultra-cheap solar glass in India for domestic solar module makers in the country. With the imposition of these duties, the availability of cheap solar glass has gone. Experts said that the issue of solar glass alone can add upto Rs 420-Rs 450 per module (for a 540Wp module).

The Indian government this year also imposed anti-dumping duties against the imports of Aluminium frames to counter the dumping of cheap Aluminium frames in India. This factor can also add up to the new costs for the production of solar modules domestically in India.

Rumblings of loss-making Chinese manufacturers seeking an OPEC-like cartel to control production and force prices up have also increased, which would make us think that a price increase is definitely possible post-mid-year in 2025.

So what happens if prices continue to remain high in India? Many people have argued that the ‘triple protection’ for Indian manufacturers is overkill. That could mean the reduction of Basic Customs Duties on imports while retaining ALMM.

2. Battery Storage Emerges 

If 2024 was the year when BESS jumped into the spotlight with an unprecedented number of tenders on offer and awarded, 2025 might be where it establishes itself as the only storage option to 2032 or thereabouts. This has happened thanks to two reasons. One, the obvious one of BESS prices dropping fast, thanks to China yet again, to a level where BESS today is competitive with thermal power, for instance, at least three years before schedule. The second more worrying reason is the expected challenges that will be faced by many PSP (Pumped Storage Projects), be it on environmental or other grounds, leading to significant delays in ramping up planned PSP capacity, despite several players announcing their plans to start PSPs to make renewable energy more firm. This includes the planned investment by Adani Green for developing 5 GW of PSPs. Firms like JSW Power, Tata Power, NHPC, KPCL and others have already announced their plans to develop PSPs. But with a 5-6 year gestation period for PSP projects to come online versus 18 months to 30 months for large BESS, the immediate answer is obvious.

A further drop in battery storage prices will only shift the pendulum further towards BESS for large grid-connected projects. On the ground, this will show up in more use of BESS in C&I segments, and the emergence of the Hybrid inverter-powered solar rooftop category in a significant way. Actual action will be visible in H2 of 2025, as projects move to the procurement and installation stage. Expect to see a whole new world of global Battery players showcasing their wares prominently.

Renewavble energy experts said that the investments towards this sector will rise in 2025. “In 2025, modernizing grid infrastructure, advancing energy storage solutions, and strengthening the domestic supply chain will be critical priorities. By 2030, India will need around 38 GW of battery storage capacity to seamlessly integrate renewables into the grid, underscoring the need for significant investments in this space. Additionally, green hydrogen presents immense potential to decarbonize industries and diversify renewable energy offerings.Looking ahead, we anticipate a surge in renewable energy investments, driven by increased participation from both private and public sectors, setting the stage for continued growth in 2025,” Srivatsan Iyer, Global Chief Executive Officer, Hero Future Energies said.

3. Renewable Capacity Additions

Renewable energy capacities in 2024 witnessed faster installations compared to previous years. This was triggered by a higher number of tenders of different sizes, released in different formats. As per the latest data, India has a total of 94 GW of installed capacity of solar energy and 47.9 GW of wind energy. India’s current renewable energy capacity by the end of November 2024 stood at 158 GW (excluding large hydro).

Renewable energy project installations have already picked pace in the country. So far this calendar year, India has added close to 22.0 GW of new renewable energy capacities, with Solar itself accounting for close to 20 GW of that 22 GW.

However, the path ahead in 2025 seems to be more promising. It is not just because of the large number of projects and tenders floated, but also the looming deadline of June 2025 for 100% ISTS (Inter-State Transmission System) charges exemption for renewable energy projects. That could mean a race to complete projects in 2025, beating the 15 GW target set in H1 of 2024 by a margin possibly. With projected wind energy additions of over 4 GW in 2025, final numbers for 2025 could be pushing 30 GW, a number India needs to build on to reach the target of 500 GW target by 2030.

Higher installations will be backed by better finance availability, better availability of modules, and more EPC firms capable of delivering larger projects in time.  In fact, unless 30-35 GW additions per year are considered the new ‘normal’ in 2025, India can bid goodbye to its 500 GW target.

4. Wind energy prices

While wind tender bids tended to move up during the year, what is worrying is that the trend could continue well into 2025 as well. That will put a crimp into many developer plans to bid on Hybrid, RTC or FDRE projects aggressively. The higher bids are a direct result of the consolidation seen in the sector in India, with the market reduced to just 3-4 players that matter. Worryingly, Operations & Maintenance (O&M) in wind, a complicated, specialised job at the best of times, has also been consolidating with the two Indian players, Suzlon and Inox Wind, controlling a significant part of the market. If prices continue to be closer to Rs 4/kWh than to Rs 3 for wind energy, expect resistance to build up yet again from developers, and pressure on the government to ‘do something’.

5. Residential rooftop solar to be a major contributor

The Indian market wore an ‘abnormal’ look for most of this decade, thanks to the anaemic contribution from residential rooftop solar. Contrast that with other large markets like the US, EU, Australia and of course, China, where rooftop solar has a much higher share. Going upto over 30% in Australia, or even higher in some smaller European markets.

With the PM Surya Ghar Scheme, India has given a new thrust to the sector and eased out several formalities regarding rooftop solar installations like automated Technical Feasibility Report (TFR) for smaller setups etc.

Centralized digitized process and timely subsidy disbursement from the Centre and states under the scheme has generated trust among stakeholders. MNRE data suggests that with a total of 15 GW of solar capacity coming from the PM Surya Ghar scheme and more, residential rooftop solar now comprises 16% of India’s total solar capacity. 2025 should see this number jump significantly, with at least 3 GW of residential rooftop solar possibly. Add to that rooftop solar from other segments, and it could well deliver over 6 GW in 2025, an unthinkable number as recently as 2023.

6. PM-KUSUM To Make a Bigger Splash

The PM-KUSUM scheme, specially crafted for decarbonizing the Indian agricultural sector is finally coming into its own now. The scheme, launched in March 2019 struggled to make an impact until 2024, thanks to Covid disruptions and many issues linked to execution.

Now more states have shown increased interest in the solarisation of agricultural feeders due to the dependency of these feeders’ lines towards fossil fuels.

While only component B of the scheme which envisaged 10 lakh off-grid solar pumps made serious headway until now, the much bigger Component C  which seeks grid-tied solar pumps is generating strong interest now. With a 35 lakh pump target, Maharashtra came out in a big way to go for feeder-level solarisation through the scheme. Last year it announced plans to generate 7 GW of solar capacity through this mode.

Currently, only six states have achieved success in this but a number of other states have sanctioned plans. The states that have already started work towards the solarisation of feeders include Gujarat, Goa, Kerala, MP, Maharashtra and Rajasthan.

Finally, the ground-mounted solar component of PM-KUSUM has also seen worthwhile progress. The scheme which targets 10,000MW of solar installations, needs a few tweaks but could show some real numbers this year. Lending a sense of urgency to all these will be the looming deadline of March 2026, the current deadline for the scheme, which will require the pieces to fall into place this year itself for the scheme to be termed a success.

7. People issues – Higher Salaries, Customer Service As Differentiator

Demand is up, manufacturing is up, players are up, and the installed base is up. It stands to reason that people’s issues will come to the fore as well. From hiring to customer service, the sector is going through a churn, and we expect 2025 to provide some clear pointers for the next decade of solar. From institutes finally starting solar courses or modules, to more technical skills training, expect education to bite into the solar jobs opportunity in a big way. And why not? With possibly a million engineers and 10 million people needed by 2030, the sector needs all the skilled manpower it can get. And could face a real challenge if the system cannot deliver these skills.

2024 saw salary jumps of over 200% in many cases in manufacturing, as Indian firms rushed to ramp up module, and now, cell manufacturing. Firms saw projects delayed as Chinese experts were not issued visas to come and train. Manufacturers are finding their own ways to manage. Be it poaching, training, or over-hiring. Yes, overhiring to ensure enough stay on finally to keep operations running. Industry players can look forward to salary hikes above the norm and for senior technical personnel, high demand for their skills.

As players proliferate and the installed customer base becomes larger, customer service, for long ignored by most firms, might well decide profitability, and even survival for many firms. Especially in solar inverters, and for many small installers. Not for any reason is annoyance with bankrupt or disappearing installers the biggest bugbear in developed markets. That means an advantage to large players like Tata Power, Solar Square and many others to build their brands on service quality.

8. China pushback, duties and bottlenecks 

The role of China has always been crucial in deciding the fate of the growth of solar industries across the world, thanks to the dominance of that country in the solar supply chain. The recent reduction in tax rebate for solar cell exports is seen as one of the reasons that could increase solar module costs in India. Even in Wind Energy, it is the Chinese firm Envision Energy that has kept the competitive fires burning bright in India.

Now as the MNRE has planned to bring in ALMM for solar cells from June 2026, more than 30 solar module makers in India announced venturing into solar cell manufacturing till now. This requires direct hassle-free trade between India and China to make it a reality. It is because, in the backward linkage, India lacks wafers, ingots, polysilicon and crucial machineries which are used in the manufacturing of solar cells.

For now, China seems willing to oblige, perhaps anticipating a significant technology shift yet again for the sector, where the value of older-generation tech is no longer as high.

But any escalation of distrust could effectively still kill the sector. China’s mercantile mindset is the best insurance against that, and 2025 is not the year when India will look to overcome it for sure.

9. Will Battery Protection Follow?

If it is India, and it is manufacturing, then the threat of China is never far away. We have seen how the government has repeatedly bowed to industry demands for protection across sectors when faced with the threat of ‘dumping’. While driven by the desire to see manufacturing emerge as a key contributor in India with all the jobs it offers, one has to wonder if the next big sector will be battery making. Until now, the sector had no battery cell makers, and limited demand, which kept it off the radar. But now, with a large domestic manufacturing ecosystem taking shape, government incentives earmarked (PLI scheme), and international prices dropping, the situation is tailor-made yet again for demands from the govt. for protection. Keep in mind that this time the control of China over key raw materials is a globally acknowledged fact when it comes to Lithium, or other rare earths for instance.

That means, to protect the over 50 GWh of battery cell production it seeks, India’s consumers might have to step up yet again to allow the Industry the breathing room to grow and expand.

Especially since major Chinese, Korean and Japanese manufacturers seem to have given the country a pass so far in terms of manufacturing commitments. Let’s hope that picture can change soon.

10. A break from three permanent disruptions. 

Frequent policy tweaks, omnibus legal roadblocks (GIB Case) and discom financials have been the permanent bugbears for India’s renewable sector. We believe 2025 will see much less of all three when compared to previous years. A power minister who seems less vested in the sector per se also helps, in this case, as he dutifully follows the bureaucracies’ inputs. While it might sound boring, these could be the biggest reasons for 2025 to be the year everyone wants. The year when India’s RE capacity hits the 40 GW mark (best case scenario) in new additions.

Conclusion

There are many predictions we haven’t made, like the beeline of more renewable firms for the capital markets. Or the new focus on branding to expect from equipment makers to target the larger market. All these will happen, but the rules of engagement are clear there, and sooner than later, expect a reversion to mean, be it the matter of valuations for solar firms(lower), or the expenses on marketing (higher).