KEY TAKEAWAYS

1. India’s renewable sector will need to double its annual capacity addition to 50GW over 2025-2030 to meet the country's lofty 500GW target 
2. Capacity addition will require $175 billion and up to $150 billion for the expansion and strengthening of the transmission and distribution network
4. S&P anticipates that for most renewable energy companies, high capex--at twice the level of EBITDA--will keep leverage above 8x net debt-to-EBITDA
5. The next five years will be crucial for India's renewables sector. It has a target of 500GW (gigawatts) renewable capacity by 2030, S&P Global Ratings said on Wednesday.
6. This is a huge jump from the 214GW capacity as of March 2025. S&P Global Ratings believes onshore financing will aid capacity expansion.

“Renewable developers and distribution companies now recognize renewables can only become part of the solution if they provide more stable power. Otherwise, inherent intermittency causes greater network instability,” said S&P Global Ratings credit analyst Cheng Jia Ong.

“Renewables companies will improve scale and diversity but continue to face high leverage and execution risks as they align with the national transition target. Most companies will use debt to fund expansion, though the sector remains attractive for both equity and debt investors,” Ms. Ong said.

With a record annual capacity addition of 29.52 GW, the total installed renewable energy capacity in the country has reached 220.10 GW as of March 31, up from 198.75 GW in the previous fiscal. This performance reflects India's steady advancement towards the target of achieving 500 GW of non-fossil fuel-based capacity by 2030, as part of its commitments under the ‘Panchamrit’ goals set by PM Narendra Modi.