In Short : Moody’s reports that 69% of India’s solar potential lies in northern and western regions. To meet its 2030 renewable goals, India must invest 1% of GDP annually in green grid infrastructure. With a \$385 billion need by 2030, current funding falls short. Moody’s urges policy reforms and investor-friendly measures to boost green energy development.
In Detail : India holds immense solar energy potential, with nearly 69% concentrated in its northern and western states, particularly Rajasthan and Gujarat. This geographic advantage positions the country favorably for expanding its renewable energy base, especially in solar power generation.
To effectively harness this potential and transition to a sustainable energy system, Moody’s estimates that India must invest around 1% of its GDP annually in green grid infrastructure. This investment is vital for upgrading transmission systems and integrating renewable sources into the national grid to ensure a reliable power supply.
India has set an ambitious target of achieving 500 GW of non-fossil fuel energy capacity by 2030. Meeting this goal will require an estimated \$385 billion, with \$190–\$215 billion earmarked for new power capacity and another \$150–\$170 billion for transmission and distribution infrastructure.
Despite these goals, India’s renewable sector remains underfunded. In 2024, investments stood at just over \$13 billion—far short of the \$68 billion required each year. Factors such as project delays, regulatory bottlenecks, and land acquisition hurdles are slowing progress.
The situation is further complicated by rising investor concerns, especially after controversies involving major players like the Adani Group. These challenges have contributed to heightened risk perceptions, which deter the flow of foreign capital into the sector.
To close the funding gap, India must implement stronger policies and incentives to attract international investors. While initiatives like sovereign green bonds have had limited success, broader reforms in regulatory frameworks and more transparent investment mechanisms are essential to unlock the full potential of India’s renewable energy future.
