Renewed interest from global private equity and sovereign funds has significantly improved the profile of India’s renewable energy (RE) sector, with investments hitting almost $18 billion, or more than ₹1.60 lakh crore, during the January to September period in the current calendar year–already a three-year high.
The Institute for Energy Economics and Financial Analysis (IEEFA), in its latest report, pointed out that renewable energy sector investments in the first nine months of 2025 overtook full-year investments in the previous calendar years as the sector witnessed renewed interest from global investors.
The nine-month (January-September) investment numbers in 2025 already reached $17.96 billion, well above the full-year numbers in 2022 ($15.2 billion), 2023 ($13.2 billion) and 2024 ($10 billion), it added.
RE investments bounced back in Q3 2025 to $5.2 billion from roughly $2.9 billion during April-June. The January-March 2025 period witnessed record investments to the tune of $9.8 billion.
Investments surged by 112.6 per cent year-over-year from $2.46 billion in Q3 2024 to $5.2 billion in Q3 2025, IEEFA said.
“Global private equity and sovereign funds are showing heightened interest in India’s renewable energy sector, spurred by supportive energy transition policies and sustained economic growth. While solar power remains the primary driver of India’s energy transition, emerging hybrid applications and the integration of energy storage to deliver firm power are further accelerating investment momentum,” IEEFA pointed out.
Rising investments
According to data from the Ministry of New & Renewable Energy, Gujarat and Rajasthan, who cumulatively account for more than one-third of India’s installed renewable energy sources’ (RES) capacity, attracted over half of the investments that poured into the sector in the last five calendar years beginning 2020.
The total investments attracted by the RES sector—Solar, Wind, Small Hydro, Large Hydro, Nuclear and Bio—almost hit ₹4 lakh crore during the last five years, ending 2024 calendar year.
Gujarat led the tally attracting an investment of over ₹1.17 lakh crore accounting for almost one-third of the investments on a pan-India basis between 2020 and 2024.
Rajasthan witnessed an investment of ₹9,6191 crore in the last five years accounting for a little over 24 per cent of the total investments.
Together both the States account for over 53.5 per cent of the ₹3,99,397 crore attracted by the RES sector in the last five years since 2020. Tamil Nadu attracted the third highest (₹39,431 crore) investments in the sector since 2020.
Capacity addition
The September quarter in the current calendar year also witnessed India’s installed power capacity surpassing the 500 gigawatt (GW) mark with India becoming the country with the third-largest power generation capacity after China (3,720 GW) and the US (around 1,300 GW).
India added power-generating capacity of 16,071 megawatts (MW) in the third quarter of 2025 (July–September), with non-fossil fuel-based capacity accounting for 82.8 per cent of the additions, IEEFA pointed out.
The removal of the 100 per cent waiver of inter-state transmission system (ISTS) charges from July 1, 2025 for vanilla solar and wind projects and the progressive application of these charges in full by July 2028, has expedited the commissioning of renewable energy projects, the institute said.
“With these additions, India’s cumulative power generation capacity crossed the 500 GW mark, reaching 500.9 GW, with non-fossil fuel-based capacity accounting for 51.1 per cent of the total at 256 GW by the end of September 2025,” it added.
India has a target to achieve non-fossil fuel-based installed power generation capacity of 500 GW, accounting for 50 per cent of its total power generation capacity by 2030. India achieved the 50 per cent capacity goal around mid-2025 and now must maintain it as its overall power generation capacity grows, the institute noted.
Published on November 27, 2025