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India’s Renewable Energy Boom Faces Execution Challenges

India’s renewable energy market is at a turning point. According to a report by IEEFA (Institute for Energy Economics and Financial Analysis), the country tendered a record 73 GW of projects in 2024, surpassing its 50 GW annual target. However, over 40 GW of capacity is stuck due to unsigned Power Sale Agreements (PSAs), creating uncertainty for developers.

Key Bottlenecks

• Undersubscription: 8.5 GW of tenders in 2024 failed to attract sufficient bids, a 5x increase from 2023.
• Project Cancellations: Nearly 38.3 GW of tenders issued since 2020 have been scrapped, with energy storage (ESS) projects most affected.
• Transmission Bottlenecks: With SECI (Solar Energy Corporation of India) struggling to sell capacity, developers face risks in project execution.

What This Means for Developers

Short-Term Strategy (2024-26):

• Focus on tenders where DISCOMs (state utilities) are direct offtakers, rather than SECI-led auctions.
• Be selective in bidding for wind-solar hybrid (WSH) and energy storage projects, balancing financial risks.
• Ensure clarity on ISTS waivers before finalizing project costs.

Long-Term Strategy (2027-30):

• Expect state-level tenders to gain more traction over centralized SECI auctions.
• Financing stability will depend on clearing PSA backlogs.
• Despite falling solar module costs, developers must hedge against tariff volatility and policy risks.

India is targeting 246 GW of new solar and wind capacity by 2030, but IEEFA warns that 75 GW could face execution hurdles. To navigate these challenges, developers must align their bidding strategies with transmission infrastructure readiness, PSA finalization speed, and state-level policies.