India's Clean Energy Production is Rising- Know the Impact on Stock Market

India is making big strides in clean or renewable energy to meet its growing energy needs to protect the environment. India is the third-largest energy consumer and our energy needs increases by 5% each year. To support the growing demand, India's clean energy sector has grown quickly and it is supported by various factors. In this article, we look at the rising production of clean energy in India and its impact on market leaders.

India's Clean Energy Journey

India's journey towards clean energy began in the late 20th century, driven by the recognition of the environmental and economic benefits of renewable energy sources. The establishment of the Ministry of New and Renewable Energy (MNRE) in 1992 marked a crucial step forward. Early policies primarily focused on small-scale renewable energy projects, particularly in rural areas.

Key milestones include the 2008 National Action Plan on Climate Change (NAPCC), outlining eight national missions, including the National Solar Mission, with an emphasis on climate change adaptation, mitigation, and energy efficiency. The Jawaharlal Nehru National Solar Mission (JNNSM), launched in 2010, was created to promote solar energy technologies, initially targeting 20 GW of solar power by 2022, later ambitiously revised to 100 GW.

Renewable Purchase Obligations (RPOs), mandating a certain percentage of electricity from renewable sources, have played a pivotal role in driving demand for renewable energy.

The Current Growth: Key Drivers

Here are some of the key drivers of the rising production of clean energy in India:

Driver 1: Government Policies

India's government has set ambitious renewable energy targets to position the country as a global leader in clean energy. To achieve 500 GW of renewable energy capacity by 2030, policies like the National Solar Mission and National Wind-Solar Hybrid Policy are driving large-scale investments.

Additionally, production-linked incentives (PLI) for solar panel manufacturing and battery storage aim to boost domestic production and reduce reliance on imports. State governments offer land subsidies, tax benefits, and fast-tracking approvals to attract clean energy investments. These measures ensure sustained growth in renewable energy.

Driver 2: Technological Advancements

We mentioned above that the focus on clean energy started long ago, but recent growth has been driven by rapid innovation in clean energy technologies. For example, solar panel efficiencies have significantly improved, enabling higher energy output from the same area. Energy storage technologies, particularly lithium-ion and emerging alternatives like sodium-ion and solid-state batteries, are transforming the way renewable energy is stored and used.

Advances in wind turbine design have increased their capacity to generate power even in low-wind conditions. Additionally, smart grids and AI-driven energy management systems are helping optimize energy production and distribution, making clean energy more reliable and scalable.

Driver 3: Private Sector Participation

The private sector has emerged as a critical force in India's clean energy push. Companies like Reliance Industries, Adani Green Energy, and Tata Power are making significant investments in solar, wind, and green hydrogen projects. Startups and new players are also entering the market, contributing to the growth of EV charging infrastructure, battery production, and rooftop solar installations.

Collaborations between domestic and international firms are fostering innovation and bringing in much-needed capital and expertise. The private sector's proactive role is to ensure faster implementation of projects and address gaps in government.

Key Ongoing Renewable/Clean Energy Projects in India

Here are details of ongoing renewable energy projects in India:

	TITLE OF THE PROJECT	PROJECT COST, MNRE SHARE (Rs IN LAKH) AND DURATION
Solar PV
1	National Centre for Photovoltaic Research and Education (NCPRE) Phase-III	Project cost = Rs. 4092 Lakhs
		MNRE share = 100%
		Duration = 4 years
2	National Primary Standard facility for cell calibration	Project cost = Rs. 2166.76 Lakhs
		MNRE share = 100%
		Duration = 3 years
Wind Energy
1	Integrated Wind and Solar resource Assessment	Project cost = Rs. 1799 lakhs
		MNRE share = 100%
		Duration = 5 years
2	Met-Ocean Measurements (Wind, Wave, Tide, Current, Water Level, etc.,) at Gulf of Khambhat and Gulf of Mannar	Project cost = Rs. 4464 lakhs
		MNRE share =
		100%Duration = 5 years
Hydro Energy
1	Green Hydrogen Mobility Projects at Leh	Project Cost = Rs. 7227 lakh
		MNRE Share = Rs. 2598.5 lakhs
		Duration = 3 years
2	Design & development of 20kW Low Temperature Polymer Electrolyte Membrane Fuel Cell (LTPEMFC) with high indigenous content	Total Project Cost= Rs 2138.74 lakhs
		MNRE Share= Rs 1773.74 lakhs
		Duration= 3 years
3	Setting Up of a Centre of Excellence on Hydrogen Energy at National Institute of Solar Energy (NISE), Gwal Pahari, Haryana	Total Project Cost= Rs.1030.47 lakhs
		Duration= 3 years

Impact on Market Leaders

Energy Sector Giants (eg, NTPC, Tata Power)

Traditional energy giants are transforming as they shift focus from coal and fossil fuels to renewable energy sources. Companies like NTPC and Tata Power are expanding their renewable portfolios by investing heavily in solar, wind, and hybrid energy projects. These efforts allow them to diversify revenue streams and align with sustainability goals. We have seen NTPC Green coming with their IPO sometime back.

However, the transition comes with challenges, such as managing the high initial costs of clean energy projects and the need to decommission older, less-efficient thermal plants. The competition from newer, leaner renewable-focused companies further pushes these giants to innovate.

Renewable Energy Companies (eg, Adani Green, ReNew Power):

Renewable energy market leaders are capitalizing on India's clean energy push, seeing significant opportunities to scale operations. Companies like Adani Green and ReNew Power are securing large-scale solar and wind projects, supported by favorable government policies such as tax benefits and subsidies.

However, their rapid expansion also requires heavy upfront investments, increasing reliance on debt and raising concerns about financial stability. Additionally, global supply chain issues, particularly for solar panels and rare earth materials, pose risks. Nevertheless, their focus on large-scale, high-capacity projects ensures they remain key players in India's renewable grid.

New Entrants in Green Hydrogen and EVs (eg, Reliance, Ola Electric)

India's focus on emerging technologies like green hydrogen and electric vehicles has attracted companies like Reliance and Ola Electric, positioning them as pioneers in these sectors. Reliance's investment in green hydrogen projects and Ola's focus on electric mobility reflect their ambition to dominate these growing markets.

However, these ventures require massive capital investments to build infrastructure, such as electrolyzer plants for hydrogen production or EV charging networks. Additionally, these companies face regulatory uncertainties as policies around these technologies are still evolving. Despite these challenges, their early entry and large-scale investment plans provide them with a competitive advantage in shaping India's clean energy future.

Read More: EV Market in India

Before you go

The rising production of clean energy in India is a transformative trend that benefits market leaders willing to innovate and adapt. Companies leveraging this shift to invest in technology, scale operations, and collaborate strategically will emerge as long-term winners in India's evolving energy landscape.