India’s Renewable Energy Sector Sees Surge In FDI: CEEW

India's Renewable Energy Sector Attracted FDI Equity Investment of USD 6,137.39 Mn in Last Three Financial Years

India’s renewable energy sector accounted for nearly 8 percent of total foreign direct investment (FDI) inflows in the financial year 2024-25, up from about 1 percent in FY21. The trend was revealed in the latest Market Handbook released by the Council on Energy, Environment and Water’s Green Finance Centre (CEEW-GFC).

The sector attracted USD 3.4 billion in FDI in the first three quarters of FY25, almost matching the total FDI inflows of USD 3.7 billion for all of FY24. CEEW-GFC said this reflects growing investor confidence in India’s clean energy transition. In FY25, tenders featuring energy storage components comprised 24 percent of total renewable energy auctions, underlining innovation in procurement formats. These developments were further supported by the Reserve Bank of India’s sovereign green bond issuances, totalling USD 3.8 billion across six auctions.

India to require $600 billion for power sector transition

A separate report by consultancy Wood Mackenzie said India will need an estimated USD 600 billion in power sector investment over the next decade to meet its renewable energy targets. It said the country’s energy consumption per unit of GDP remains lower than China’s in the early 2000s, crediting recent gains to lower industrial sector energy use.

According to the report’s high-growth scenario, India’s crude steel and cement output by 2033 will be around one-third of China’s 2011 levels. Greater use of renewables and electric vehicles is also expected to further reduce energy intensity.

The report noted India’s power demand has risen to almost 4,000 TWh, with increases in both coal and renewable generation.

12 States Switch to Net Billing for Rooftop Solar: CEEW

Also Read

Renewables dominate new capacity additions

India added about 33 GW of new power generation capacity in FY25, of which a record 89 percent (29.5 GW) came from renewable sources—up from around 71 percent in FY24. India’s total renewable energy capacity now stands at about 220 GW out of a total of 475 GW. The share of coal and lignite declined from 49 percent (218 GW) in FY24 to 47 percent (~222 GW) in FY25.

60% Of Municipal Bonds Miss Being Labelled Green: CEEW-GFC

Also Read

Gagan Sidhu, director at CEEW-GFC, said, “India’s energy transition is at a crossroads. Renewable energy has emerged as the dominant source of capacity addition, with around 42 GW auctioned in FY25. Notably, 59 percent of this was under formats such as firm and dispatchable renewables (FDRE) and hybrids, addressing grid stability amid rising renewables.”

Sidhu added that despite a drop in central-level tenders—from 47.5 GW in FY24 to 33 GW in FY25—state-level activity remained strong. The shortfall, he said, stemmed largely from fewer wind energy tenders.

Storage sees sharp price drop

Shalu Agrawal, director of programmes at CEEW, said the sector was seeing progress in diversifying finance, innovating tenders, and adopting new storage technologies. “FY25 saw a sharp decline in energy storage prices, improving the economics of grid integration. We anticipate a tipping point for storage, much like we saw with solar a decade ago,” she said.

India Must Aim For 600 GW Of Clean Energy By 2030: CEEW

Also Read

The CEEW-GFC Handbook reported that seven standalone battery energy storage system (BESS) tenders were completed in FY25. The lowest discovered tariff fell to INR 1.84 per unit with viability gap funding (VGF) support—a 54 percent drop from FY24. Sixteen BESS tenders were announced during the year, and VGF support was approved for 4,000 MWh of storage capacity to be deployed by 2030–31.

Electricity demand and EV sales surge

India’s peak power demand hit a record 250 GW in the first quarter of FY25 and remained above 220 GW throughout the year, driven by rising temperatures and economic growth. Total electricity generation rose 5 percent year-on-year. Renewables, including large hydro, now account for about 21 percent of average daily power generation.

In the mobility sector, more than 1.9 million electric vehicles were sold in FY25—a 17 percent increase from FY24. Sales exceeded 200,000 units in both October 2024 and March 2025. India achieved about 95 percent of its EV sales target for the year under the PM E-DRIVE scheme