The Indian renewable energy sector received approximately $3.2 billion in the form of foreign direct investment (FDI) from April 2015 to June 2018, says data released by the Department of Industrial Policy and Promotion (DIPP).
The highest FDI to the tune of $1.2 billion was received in year 2017-18, the data suggests.
Mercom in its Q3 2018 India Solar Market Update had highlighted that the FDI is not going towards the asset development but equity. Investments are also going to brownfields and not greenfields.
The Minister of State for Power, R K Singh, informed Lok Sabha on the issue –
“The renewable energy projects are mostly being implemented in the private sector. The steps taken by the Government to support the renewable energy sector include: fiscal and promotional incentives such as capital subsidy, accelerated depreciation, waiver of Inter State Transmission System (ISTS) charges and losses, viability gap funding (VGF) and permitting Foreign Direct Investment up to 100 percent under the automatic route.”
According to Mercom India Quarterly Market Updates, the Indian solar sector received investments to the tune of $1.86 billion in the second quarter (Q2) of calendar year (CY) 2018. Investments declined 26 percent quarter-over-quarter compared to $2.5 billion that poured into the sector in Q1 CY 2018.
The decline in investments in Q2 was largely due to slowdown in project installation activity in Q2 by 52 percent quarter-over-quarter. It was mainly because of government agencies stalling tenders with the expectation of lower tariffs, clearance of goods and services tax (GST) related issues as well as uncertainty brought on by the trade cases.
The solar installed capacity in the country at the end of Q3 CY 2018 was about 26 GW, a 53 percent increase compared to 17 GW of solar installed as of Q3 CY 2017.