IEA: India’s solar power generation could rival coal by 2040

IEA’s India Energy Outlook 2021 report predicts that solar PV power generation could rival coal within 20 years. Image: IEA)

India’s solar energy output could match coal-fired power within 20 years, but the country’s clean energy sector may need US$1.4 trillion in additional funding to ensure a “sustainable growth path”.

That’s according to a report from the International Energy Agency (IEA), which claims that falling renewable energy costs and India’s ambitious targets could see the country host 450GW of renewable capacity by the end of the decade. The India Energy Outlook 2021, published on Tuesday (9 February), argues that India will experience “the largest increase in energy demand of any country worldwide” within the next 20 years, which will drive innovation in the country’s energy mix.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Solar PV currently accounts for between 4% and 5% of India’s total power output, while more than two thirds (68.1%) of the country’s power supply last year came from coal. The IEA has claimed that solar’s share of the market could rise to 15.9% by the end of this decade, and make up just under a third (31.4%) of the nation’s power generation mix by 2040. At the same time, coal’s share of the market is expected to plunge to just over 34% in 20 years, although the report claims that this switch is “even more rapid in other scenarios”.

The IEA’s report, which is based on existing and announced policies, predicts the rate of solar capacity installations in India will continue to rise over the next two decades, with 321GW of solar PV expected to be deployed between 2035 and 2040.

It also claims that India could become a prominent player in battery energy storage, deploying up to 200GW of capacity by 2040.

The report comes just as India’s renewables market has started to surge. More than 500MW of solar PV plants were installed in India in December 2020 alone, according to JMK Research & Analytics, while Prime Minister Narendra Modi recently claimed that the country’s renewables capacity is expected to reach 220GW by 2022, exceeding its original 175GW target.

However, it warns that US$1.4 trillion of additional funding is required for clean energy technologies needed to put India on a sustainable path over the next 20 years, “or 70%, higher than in a scenario based on its current policy settings”.

“More than that of any other major economy,” the report said, “India’s energy future depends on buildings and factories yet to be built, and vehicles and appliances yet to be bought”

India’s solar PV market, according to the report’s states policies analysis, could be worth close to US$10 billion by 2040, while its battery storage market’s value could exceed US$20 billion in the same time.

Dr Fatih Birol, the IEA’s executive director, said that government policies to accelerate India’s clean energy transition “can lay the foundation for lasting prosperity and greater energy security.

“India has made remarkable progress in recent years, bringing electricity connections to hundreds of millions of people and impressively scaling up the use of renewable energy, particularly solar,” said Dr Birol, adding that there is a “tremendous opportunity for India to successfully meet the aspirations of its citizens without following the high-carbon pathway that other economies have pursued in the past.”

“The energy policy successes of the Indian government to date make me very optimistic about its ability to meet the challenges ahead in terms of energy security and sustainability.”

21 March 2024
4pm (GMT)
This special webinar will look at one of the most important changes impacting PV manufacturing today; how to establish and sustain new facilities around the world. For more than two decades, policy-makers have grappled with the challenges of nurturing domestic manufacturing sectors. Many countries have tried to create domestic sectors: Japan, Taiwan, South Korea, India, Europe and the U.S. But success stories have been rare. Mistakes seem to be repeated. And all the while, Chinese dominance of the industry has only increased. However, in the past 2-3 years, new drivers have emerged that suggest the dream of a global PV manufacturing ecosystem could be a reality. Join us as we shed light on this.
26 November 2024
Málaga, Spain
Understanding PV module supply to the European market in 2025. PV ModuleTech Europe 2024 is a two-day conference that tackles these challenges directly, with an agenda that addresses all aspects of module supplier selection; product availability, technology offerings, traceability of supply-chain, factory auditing, module testing and reliability, and company bankability.

Read Next

Subscribe to Newsletter

Upcoming Events

Solar Media Events
March 12, 2024
Frankfurt, Germany
Upcoming Webinars
March 13, 2024
9am EDT / 1pm GMT / 2pm CET
Solar Media Events
March 19, 2024
Texas, USA