India Surges to Third-Largest Solar and Wind Energy Producer, Boosting Economic Outlook

By Tristan, Contributor
April 8, 2025 – 5:30 PM CST, Chicago, IL

India has officially become the world’s third-largest producer of electricity from solar and wind energy in 2024, overtaking Germany. This milestone, reported by global energy think tank Ember in its sixth edition of the Global Electricity Review, underscores India’s rapid transition toward clean energy and its growing influence in the global energy landscape. The report, released today, highlights that wind and solar energy together generated 15% of global electricity last year, with India contributing 10% to this total.

India’s ascent to the third spot comes as no surprise to energy analysts, given the nation’s aggressive push toward renewable energy over the past decade. In 2024 alone, India added 24 gigawatts (GW) of solar capacity—more than double the additions in 2023—making it the third-largest solar market globally after China and the United States. The country also recorded the fourth-largest increase in solar generation worldwide, adding 20 terawatt hours (TWh) of new solar power. Wind energy, too, has seen significant growth, with India ranking fourth globally in installed wind power capacity as of 2023.

The Ember report notes that low-carbon sources, including renewables and nuclear power, provided 40.9% of the world’s electricity in 2024, crossing the 40% mark for the first time since the 1940s. In India, clean energy sources accounted for 22% of electricity generation last year, with hydropower contributing 8% and wind and solar together making up 10%. While this figure remains below the global average, it highlights the immense potential for further expansion in India’s renewable energy sector.

India’s clean energy transition has been driven by a combination of government policies, private sector investment, and international collaboration. The country has committed to achieving 50% of its installed electric power capacity from non-fossil fuel sources by 2030, a target outlined in its Nationally Determined Contributions (NDCs) submitted to the UNFCCC in 2022. Additionally, India has set an ambitious goal of reaching 500 GW of non-fossil fuel capacity by the same year, a benchmark that, while not formally included in the NDCs, remains a key reference in national energy planning documents like the 14th National Electricity Plan.

The economic implications of this milestone are significant. India’s rapid growth in renewable energy is expected to bolster its economic outlook by attracting substantial investments and creating new job opportunities. The International Energy Agency (IEA) has projected that India’s leadership in clean energy technologies could expand its market for solar PV, wind turbines, and lithium-ion batteries to over $40 billion per year by 2040. This growth is already evident, with foreign direct investment in India’s renewable energy sector reaching $3.76 billion in FY2023-24 alone.

Moreover, the renewable energy sector is becoming a major driver of employment in India. The IEA estimates that the country’s clean energy workforce could grow by 1 million over the next decade. Projects like the Gujarat Hybrid Renewable Energy Park, which is set to become the world’s largest solar-wind hybrid project with a capacity of 30 GW, are expected to create thousands of jobs in construction, maintenance, and related industries. This park, currently under development in the Rann of Kutch desert, has already begun generating 3 GW of power as of 2025.

India’s renewable energy boom is also helping to decouple economic growth from carbon emissions, a critical step in addressing climate change. Electricity generation accounts for nearly half of India’s annual carbon dioxide emissions, which stood at 1.18 gigatonnes in 2023. By increasing the share of clean energy in its power mix, India is reducing its reliance on coal, which still accounted for 49.2% of the country’s total power generation capacity in 2024, according to the Institute of Energy Economics and Financial Analysis (IEEFA).

The decline in coal’s share of India’s power sector—down to under 50% for the first time in 2024—marks a significant shift. This achievement is well ahead of the Indian government’s target of 50% cumulative power generation capacity from non-fossil fuel sources by 2030. However, coal remains a dominant player in meeting India’s energy needs, particularly during periods of high demand, such as the severe heatwaves in 2024 that drove a 10.4% increase in electricity demand from April to June compared to the same period in 2023.

Ember’s Asia Programme Director, Aditya Lolla, emphasized the broader implications of India’s clean energy transition. “Asia’s clean energy transition is picking up speed, driven by record growth in solar and other renewables,” Lolla said. “With electricity demand set to rise across the region, a robust clean energy market is crucial for the continued expansion of clean power. This will not only strengthen energy security and economic resilience but also help emerging countries access the benefits of a new clean energy market economy.”

India’s renewable energy growth is also enhancing its energy security by reducing dependence on imported fossil fuels. The country’s solar and wind projects are increasingly cost-competitive with thermal power generation, with the cost of solar PV electricity in India falling to about one-third of its 2010 price by the end of 2018. This cost-effectiveness has made solar the cheapest form of renewable energy in India, even undercutting power generated from fossil fuels like coal and gas in many cases.

The private sector has played a pivotal role in this transition. Companies like Tata Power and Renew Power are leading the charge, with ambitious plans to expand their renewable energy portfolios. Tata Power, for instance, aims to have 80% of its total power come from clean energy by 2030, while Renew Power plans to double its capacity to 10,000 MW within five years. These efforts are supported by government initiatives like the Production-Linked Incentive (PLI) scheme, which has reduced India’s solar cell and module imports by 20% and 57%, respectively, in 2024-25.

International collaboration has also been a key factor in India’s success. The International Solar Alliance (ISA), initiated by India in 2015, has facilitated global cooperation in promoting solar energy, helping India leverage expertise, technology transfer, and funding. UN climate chief Simon Stiell recently called India a “solar superpower,” noting that fully embracing the global clean energy boom would accelerate the country’s economic rise.

Despite these achievements, challenges remain. India’s clean energy generation, while growing rapidly, is still not keeping pace with the country’s burgeoning power demand, which rose by 5% in 2024. Clean generation met only 33% of this increase, with coal filling the majority of the gap. This reliance on coal has kept India’s power sector emissions on an upward trajectory, with a 7.2% rise in 2023 due to a decline in hydropower generation caused by droughts.

Experts warn that India must accelerate its renewable energy deployment to meet its 2030 targets. Ember’s analysis suggests that annual capacity additions need to increase significantly to achieve the goal of tripling renewable capacity by 2030, as agreed upon at COP28. The report also highlighted the need for increased funding, estimating that India will fail to deploy 500 GW of renewable energy capacity by 2030 without a 20% annual increase in investments from current levels.

Another challenge is the variability in electricity output from solar and wind sources, which can exceed demand during certain times of the day, particularly around midday. This variability, coupled with rapid growth in electricity consumption—driven by increased use of air conditioning during heatwaves—puts pressure on India’s grid infrastructure. The country is becoming a global leader in battery storage to address this issue, with solar and wind power paired with 4-hour battery storage systems already cost-competitive with new coal and gas plants.

The environmental impact of India’s renewable energy expansion is another area of concern. While solar and wind projects reduce carbon emissions, the extensive use of solar-powered water pumps has led to severe groundwater depletion in arid regions like Rajasthan, where water tables have fallen to depths of 400 feet. This highlights the need for sustainable practices in the deployment of renewable energy technologies.

On the positive side, India’s renewable energy sector is creating new opportunities for innovation. Solar panels are being used to harvest rainwater, which can be filtered and disinfected to produce drinking water—a valuable resource in a country where good-quality water is becoming scarce and costly. This dual use of solar infrastructure could make solar PV power plants profitable even in high-rainfall areas, further boosting the sector’s economic viability.

The global context of India’s achievement is also noteworthy. Renewables added a record 858 TWh of clean electricity worldwide in 2024, a 49% increase from the previous record in 2022. Solar was the largest source of new power for the third year running, adding 474 TWh globally. India’s contribution to this growth—particularly its 18 TWh increase in solar generation—placed it among the top four countries driving global solar growth, behind China, the United States, and Brazil.
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Looking ahead, India’s renewable energy sector is poised for continued growth. The government’s plan to issue 50 GW tenders for wind, solar, and hybrid projects in FY2023-24, combined with private sector investments like NTPC Green Energy’s $9.59 billion commitment to green hydrogen and renewable projects in Maharashtra, signals a strong commitment to a sustainable energy future. If India can overcome its challenges and maintain this momentum, it could not only meet its 2030 targets but also solidify its position as a global leader in clean energy.
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In the words of Phil MacDonald, managing director of Ember, “Cleantech, not fossil fuels, is now the driving force of economic development. The era of global fossil growth is coming to an end, even in a world of fast-rising demand.” For India, this transition to clean energy is not just about reducing emissions—it’s about building a more resilient, self-reliant, and prosperous economy for the future.