India’s solar century: a perspective on the scaling journey of renewable energy

India has become the fourth nation to reach a ‘solar century,’ surpassing 100 gigawatts (GW) of installed solar capacity. But what made this milestone possible? Suvojoy Sengupta, Chief Executive of AECOM in India, explores four critical factors behind the success.

On January 31, 2025, India achieved a significant milestone by exceeding 100 GW of installed solar capacity, becoming the fourth nation to reach this ‘solar century’ after China, the United States and Germany. This remarkable growth—from 2.82 GW in 2014 to 100 GW in 2025, alongside an additional 48 GW of wind energy—further solidifies its position as a global leader in renewable energy. 

The decline in solar tariffs during this period has been equally striking. In 2015, prices ranged from ₹4.65 to ₹5.15 per kilowatt-hour (kWh); by 2024, they had dropped to around ₹2.15 to ₹2.40 per kWh. This represents a reduction of 55–60 per cent in nominal terms and an estimated 75–80 per cent when adjusted for inflation. 

Having worked closely with multiple stakeholders in the renewable energy sector over the past decade, we have observed four key factors that have underpinned this success, which are outlined below. 

1/ Agile entrepreneurship

The solar energy business is not for the faint-hearted. Achieving 100 GW involves the acquisition of around half a million acres of land, over 200 million solar modules, more than 4 million tonnes of steel as well as approximately 25 million man-months of labour—all evidence of the labour-intensive nature of solar projects.  

Independent Power Producers (IPPs) face numerous challenges, including land acquisition, supply chain management, timely transmission connectivity, navigating regulatory labyrinths, securing financing, and collecting payments from state distribution utilities.  

Leading players in the Indian renewable sector are mainly home-grown companies who have embraced entrepreneurial and agile approaches to address the challenges highlighted above.  

Most large international renewable energy companies—despite hiring local management—have struggled to scale effectively in India. 

2/ Constructive engagement among stakeholders

The power sector is highly regulated and politically sensitive, involving multiple stakeholders, including IPPs, government agencies, regulatory bodies, investors, vendors, and technology firms. The renewable sector exemplifies effective collaboration among these entities.  

The interactions between stakeholders have admittedly not always been smooth. However, on complex issues facing the sector, IPPs and investors have been forthcoming with constructive suggestions and government has been willing to listen and incorporate relevant proposals into policy.  

Early policy measures—such as Inter-State Transmission System (ISTS) waivers, the must-run status for renewables and central Power Purchase Agreements (PPAs)—have significantly mitigated credit risks for IPPs.  

Moreover, agencies like the Solar Energy Corporation of India (SECI) have played a pivotal role in demand aggregation and the establishment of large-scale solar parks during the early stages of development, when private IPPs were less equipped to assume these risks. This successful partnership serves as a model for scaling collaboration between public and private stakeholders across other infrastructure sectors. 

3/ Relentless focus on engineering innovation 

Capital expenditure in Indian solar projects is among the lowest worldwide, averaging around $400,000 per megawatt (MW). This benchmark has been achieved despite a reliance on imported solar modules, which account for 50–60 per cent of per-MW costs.  

Notably, non-module costs for Indian projects are 60–70 per cent lower than in comparable regions. Innovations include advancements in inverter orientation, structural design, the application of anti-soiling coatings to reduce cleaning frequency and 1.4-1.5X direct current (DC) overloading to maximise inverter utilisation.  

Furthermore, IPPs are increasingly adopting advanced analytics, robotics and AI to optimise energy output and enhance project designs. They continue to relentlessly innovate, optimise and squeeze costs out of every element of the plant while maintaining quality and safety standards.   

Some commentators have referred to this approach as ‘jugaad’—a term that describes quick, makeshift solutions to overcome constraints. However, this is not just a case of improvisation or short-term fixes. Instead, it reflects a ‘design-to-value’ mindset, where every element of the project is optimised through rigorous engineering and cost efficiency. This focus on continuous improvement is essential in an industry where competition is fierce, and profit margins are tight. 

4/ Building investor confidence

India’s renewable energy sector has successfully attracted equity capital from non-government sources, with institutional investors, including pension and sovereign wealth funds, increasing their commitments. This success in attracting global capital is significantly ahead of other infrastructure sectors, particularly in energy.  

Key factors contributing to this growing investor confidence include sustained policy stability, strong execution by IPPs and an evolving balance of risks between the government and its private partners.  

A review of bidding documents and PPAs from 2015 compared to current iterations reveals a trend toward more bankable and internationally compliant contractual terms. Over the past decade, policies have effectively balanced risk between the government and the private sector, allowing the market to price these risks appropriately and thus offer adequate returns. 

Sustaining the momentum

India’s ‘solar century’ is just the first step towards its ambitious target of 500 GW of non-fossil energy by 2030. Innovative models, such as hybrid systems, peak power generation, flexible demand response and energy storage investments, will be key to sustaining this momentum. 

This milestone coincides with India Energy Week (11-14 February 2025), where industry leaders are highlighting the need to balance policy objectives related to energy affordability, security, and decarbonisation. India’s rapid renewable energy growth proves that these goals can be pursued together, setting a strong precedent for the future.