5 Reasons For Fall in RE Tenders and Awards in 2025 (And How To Course Correct)

India has long positioned itself as a global leader in renewable energy (RE) growth, driven by ambitious targets, investor interest, and a strong policy push. However, as we step into mid-2025, a worrying trend has emerged. There has been a significant drop in renewable energy tenders and awards, particularly in solar and wind segments. According to data from the Central Electricity Authority (CEA), the first quarter of 2025 saw a nearly 42% drop in utility-scale solar tenders compared to the same period last year. The cumulative capacity awarded also shrunk by over 38%. This is more than a seasonal slump, it’s indicative of underlying systemic issues.

Here are five key reasons behind this decline and more importantly, potential solutions to revive momentum.

DISCOM Payment Delays and Financial Uncertainty

Persistent payment delays by distribution companies (DISCOMs) have eroded the confidence of developers and EPC players. According to PRAAPTI Portal data (March 2025), total outstanding dues of DISCOMs to RE generators stood at Rs 16,800 crore, up by 12% year-on-year. Delayed payments severely affect the liquidity and operations of RE developers, making them cautious about participating in new tenders.

Solution:

The central government must enforce stricter financial discipline among DISCOMs, perhaps by linking financial assistance to timely payment records. Introducing a centralized payment security mechanism—similar to the Renewable Energy Payment Security Mechanism launched earlier—on a broader scale can provide financial assurance to stakeholders.

Aggressive Tariff Caps Discouraging Participation

Tariff caps set unrealistically low by agencies like SECI and NTPC have led to poor bidder turnout. While the intent is to keep power affordable, the ground realities of module price volatility, financing costs, and infrastructure expenses aren’t reflected in the capped tariffs. In a February 2025 solar tender, for instance, only 520 MW was bid out of 1,200 MW offered, primarily due to an unviable ceiling tariff of Rs 2.35/kWh.

Solution:

The government and tendering authorities should adopt a more market-driven approach. Allowing tariff discovery through competitive bidding without restrictive caps can boost developer confidence and lead to more realistic price discovery.

Uncertainty in Policy Implementation and Delays in Land Clearances

Many tenders get awarded but then see indefinite delays due to a lack of land acquisition or environmental clearances. The policy framework at the state level remains fragmented, and ease of doing business varies drastically. Developers often face hurdles in acquiring contiguous land parcels, especially for solar parks in states like Maharashtra and Rajasthan.

Solution:

A centralized single-window clearance system must be institutionalized for all RE projects. Further, pre-identified, pre-cleared land banks for renewable energy should be created with guaranteed connectivity to the transmission grid. This will reduce project gestation periods and encourage participation.

Rising Import Costs and Uncertainty Around Domestic Manufacturing Policies

The Basic Customs Duty (BCD) on imported solar modules and cells, along with the Approved List of Models and Manufacturers (ALMM) enforcement, has caused planning disruptions. While promoting domestic manufacturing is commendable, a lack of adequate domestic supply chain depth has created bottlenecks. As per industry estimates, module prices have increased by nearly 22% year-on-year due to import constraints and global supply issues.

Solution:

The government must ensure a balanced approach—supporting domestic manufacturing without paralyzing project execution. Providing clarity on ALMM exemptions for specific projects and investing in scaling up domestic manufacturing capabilities is crucial. Moreover, incentivizing module quality over mere domestic origin can ensure better outcomes for developers and end-users.

Transmission Infrastructure Lagging Behind Generation Capacity

India’s RE generation targets are outpacing the growth of transmission infrastructure. Several awarded projects are stranded due to non-availability of transmission connectivity, especially in remote locations. For example, in Gujarat and Tamil Nadu, developers face delays in achieving Long-Term Access (LTA), leading to missed commissioning deadlines.

Solution:

Transmission development must run parallel with generation planning. Strengthening the Green Energy Corridor (GEC) and incentivizing private sector participation in transmission development are key. The government can also consider strategic public-private partnerships (PPPs) to expand intra-state transmission lines and integrate decentralized RE sources.

India’s renewable energy sector is at a pivotal juncture. While short-term challenges have slowed the tendering and awarding process in 2025, the long-term fundamentals remain strong. Policy recalibration, financial reforms, and infrastructure alignment are the need of the hour.

We remain optimistic and committed to India’s RE goals. With a collaborative approach between policymakers, developers, financiers, and manufacturers we can restore investor confidence and ensure that India remains on track to meet its 500 GW non-fossil fuel capacity target by 2030. The road ahead is challenging, but it’s also full of opportunity.