The Government of India has set targets which will take the total renewable capacity to 175 GW by the end of 2022. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass power and 5 GW from small hydro power.
The government of India through Ministry of New and Renewable Energy (MNRE) is playing a proactive role in promoting the adoption of renewable energy resources by offering various incentives such as generation-based incentives (GBIs), capital and interest subsidies, viability gap funding (VGF), concessional finance, fiscal incentives etc.
The National Solar Mission aims to promote the development and use of solar energy for power generation and other uses, with the ultimate objective of making solar energy compete with fossil-based energy options. The objective of the National Solar Mission is to reduce the cost of solar power generation in the country through long-term policy, large scale deployment goals, aggressive R&D and the domestic production of critical raw materials, components and products.
The government has created a liberal environment for foreign investment in renewable energy projects. The establishment of a dedicated financial institution – the Indian Renewable Energy Development Agency (IREDA), makes for renewed impetus on the promotion, development and extension of financial assistance for renewable energy and energy efficiency/conservation projects.
Renewable energy is becoming increasingly cost-competitive as compared to fossil fuel-based generation, like the prices of solar modules have declined by almost 80% since 2008. Reserve Bank of India (RBI) has revised the guidelines for all scheduled commercial banks including renewable energy in the categories priority sector, in addition to existing categories making significant inroads for renewable energy in the priority sector lending, also bank loans for solar rooftop systems to be treated as a part of home loan/ home improvement loan with subsequent tax benefits.