India's renewable energy sector may face regulatory actions like China and Europe: Report

The JM Financial report comes as pressure on global governments rise to enforce stricter regulations and bring more discipline to renewable energy companies.

India's renewable energy sector is soon likely to face regulatory pressures that takes cues from countries such as Europe and China to deal with challenges such as grid disturbances, and negative energy prices.

Solar energy is the dominant contributor to India's renewable energy growth, accounting for 47% of the total installed renewable energy capacity. (Representational Image/Unsplash)

"As the share of renewable energy in the supply mix in India increases, we expect domestic policies to be influenced by global experiences in the next 3-4 years," news agency ANI reported, citing JM Financial.

The report comes as pressure on global governments increases to enforce stricter regulations and bring more discipline to companies in the renewable energy space, which has seen rapid growth lately.

For example, policymakers in China are moving towards reducing subsidy-driven incentives since there are issues of oversupply and negative energy prices.

European nations are also struggling with price-related challenges, leading some to control the promotion of renewables.

For instance, Germany plans to suspend subsidies for PV grid integration if electricity prices fall below zero.

This is important since, according to the report, India's total non-fossil fuel-based energy capacity had reached 217.62 gigawatts (GW) as of January 20, 2025.

In 2024 alone, a record-breaking 24.5 GW of solar capacity and 3.4 GW of wind capacity were added, which is more than a two fold increase in solar installations and a 21% rise in wind installations, compared to the previous year.

This surge was due to government incentives, policy reforms, and increased investments in domestic solar and wind turbine manufacturing, with solar energy being the dominant contributor to India's renewable energy growth, accounting for 47% of the total installed renewable energy capacity.