India’s renewable energy sector must nearly double its annual capacity additions to 50 gigawatts (GW) between 2025 and 2030 to meet the ambitious target of 500 GW, according to a report by S&P Global Ratings. This represents a significant jump from last year’s addition of 29 GW.

The global rating agency estimates that achieving this goal will require an investment of approximately USD 175 billion (around Rs 14.5 trillion) in capacity expansion, alongside up to USD 150 billion (about Rs 12.5 trillion) for the development and strengthening of transmission and distribution infrastructure.

As of March 2025, India’s renewable capacity stood at 214 GW. The coming five years are therefore critical in closing the gap to the 500 GW target by 2030. S&P Global Ratings highlighted that onshore financing will be a key driver in facilitating the capacity expansion.

Most renewable energy firms are expected to rely heavily on debt funding to support growth, although the sector remains attractive to both equity and debt investors, the report noted.

“More work needs to be done to expand India’s renewable energy capacity. We forecast at least 50 GW of annual renewable capacity addition will be required over 2025-2030 to achieve the 500 GW target by 2030. This will mean almost doubling last year’s capacity addition of 29 GW,” the report stated.

Solar power continues to be India’s preferred renewable source due to its cost-effectiveness and ease of implementation.

Currently, a large share of India’s electricity is generated from coal-fired power plants. Expanding renewable energy is viewed as essential to reducing the country’s dependence on conventional fossil fuel sources.

At the 2021 COP26 summit, India committed to an ambitious “Panchamrit” pledge, which includes reaching 500 GW of non-fossil electricity capacity, generating half of all energy needs from renewables, and cutting emissions by 1 billion tonnes by 2030. India also aims to reduce the emissions intensity of its GDP by 45 per cent and achieve net-zero emissions by 2070.