India’s Solar Growth Fueled By $9.663 Billion FDI And Government Support

The Government of India has allowed 100% Foreign Direct Investment (FDI) through the automatic route to promote renewable energy, including solar energy. Between April 2014 and June 2024, foreign companies invested approximately USD 9,663.23 million in solar energy projects across the country.

To boost solar energy development, the government has implemented several initiatives. A key measure is the issuance of renewable energy power bids totaling 50 GW per year from the fiscal year 2023-24 to 2027-28 through agencies like SECI and NTPC. Additionally, inter-state transmission charges have been waived for solar and wind power projects commissioned by June 2025, and for green hydrogen and offshore wind projects until December 2030 and 2032, respectively.

The government has also introduced a Renewable Purchase Obligation (RPO) and Renewable Consumption Obligation (RCO) to encourage the use of renewable energy. These obligations, enforced under the Energy Conservation Act 2001, carry penalties for non-compliance and include provisions for decentralized renewable energy consumption.

Further initiatives include setting up a Project Development Cell to attract investments, issuing standard bidding guidelines for competitive power procurement, and launching schemes like PM-KUSUM and the National Green Hydrogen Mission. The development of Ultra Mega Renewable Energy Parks aims to provide land and infrastructure for large-scale projects.

Transmission infrastructure is being expanded under the Green Energy Corridor Scheme, and net-metering rules have been introduced to benefit smaller consumers. The government has also implemented uniform renewable energy tariffs and launched programs to standardize solar PV modules and inverters. Additionally, the Green Term Ahead Market (GTAM) has been established to facilitate renewable energy trading.