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Long-term vision with higher budgetary allocation; a game changer for green energy stocks


10 min read | Updated on June 19, 2024, 17:22 IST

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Rising power consumption, climate change, and limited natural resources have alarmed governments worldwide. Sustainable development and achieving net-zero carbon emissions have become critical goals, driven by events like COP23. As a result, governments are increasingly supporting green energy initiatives to address these challenges.

Long-term vision with higher budgetary allocation; a game changer for green energy stocks

Long-term vision with higher budgetary allocation; a game changer for green energy stocks

The government's interest in the green energy sector has brought skin in the game for stocks operating in this particular sector. Energy companies for decades struggled with strained balance sheets as the sector demanded heavy infrastructure and to monetise from it businesses required a long gestation period.

However, over the period companies have managed to reduce debt and with government encouragement, the demand for sustainability has surged. The green energy stocks have moved significantly higher over the years.


India is the 3rd largest energy-consuming country in the world. India stands 4th globally in renewable energy installed capacity, 4th in wind power capacity and 5th in solar power capacity. The country has set an enhanced target at the COP26 of 500 GW of non-fossil fuel-based energy by 2030. This has been a key pledge under the government’s Panchamrit goals. This is the world’s largest expansion plan in renewable energy.

The installed solar energy capacity has increased by 30 times in the last 9 years and stands at 82.63 GW as of April 2024. India’s solar energy potential is estimated to be 748 GW as estimated by the National Institute of Solar Energy (NISE). The installed Renewable energy capacity (including large hydro) has increased by around 128% since 2014. Up to 100% FDI is allowed under the automatic route for renewable energy generation and distribution projects subject to provisions of The Electricity Act 2003.

As of April 2024, Renewable energy sources, including large hydropower, have a combined installed capacity of 191.67 GW.

The following is the installed capacity for Renewables

Wind Power46.16GW
Solar Power82.63GW
Small Hydropower5GW
Large Hydropower46.92GW
Waste to energy0.59GW

India has set a target to reduce the carbon intensity of the nation’s economy by less than 45% by the end of the decade, achieve 50% cumulative electric power installed by 2030 from renewables, and achieve net-zero carbon emissions by 2070. The country aims for 500 GW of renewable energy installed capacity by 2030.

India wants to produce 5 million tonnes of green hydrogen by 2030. This will be supported by 125 GW of renewable energy capacity.

Budgetary Allocations

The Ministry of New and Renewable Energy in FY24 and FY25 saw substantial increases of 48.12% and 25.71%, respectively from preceding years in budget allocation.

Below table summarizes budgetary allocation to the Ministry of New and Renewable Energy from FY14 till FY25.


Below table summarizes budgetary allocation to various schemes under green energy in the FY25 budget

Schemes**Revised 2023-2024 **Estimates 2024-25% Change
Kisan Urja Suraksha evam Utthaan Mahabhiyan1,1001,49636.00%
Solar Power (Grid)4,75710,000110.22%
Wind Power (Grid)9169301.53%
National Green Hydrogen Mission100600500.00%
Green Energy Corridor43460038.25%
Reform Linked Distribution Scheme10,40014,50039.42%
Strengthening of power systems2,562501-80.44%
Power System Development Fund9001,20033.33%
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India)4,8072,671-44.44%
Nuclear Power Projects1,7912,22824.40%
Electrification Projects8,3616,500-22.26%
( Figures in ₹ crore) (Source - Notes on Demands for Grants, Union Budget 2024-2025)

To recall last year’s announcement, the budget allocated ₹35,000 crore for priority investments in energy transition and Net Zero. Of this amount, ₹30,000 crore was designated to provide capital support to oil marketing companies for undertaking projects for energy transition, energy security and achieving Net Zero emissions by 2070.

This year, there was no such announcement for energy transition. However, budgetary estimates for the central sector scheme on grid-based solar power have more than doubled to ₹10,000 crore in FY 2024-25 from the revised estimates of about ₹4,757 crore in FY 2023-24. On the other hand, the outlay for wind power stayed almost the same ₹930 crore in 2024-25 against ₹916 crore in 2023-24.

The government announced the Pradhanmantri Suryodaya Yojana in January 2024 for rooftop solar installations in 10 million households.

Viability gap funding has also been announced for the initial addition of up to 1 GW in offshore wind energy capacity. The Union Government introduced the country’s first-ever tender last year to allocate sites for offshore wind energy projects. While the country has an installed wind capacity of 43.7 GW, it is currently limited to land-based wind projects.

The budget for the National Green Hydrogen Mission to develop green hydrogen has been increased to Rs 600 crore in the upcoming financial year from ₹100 crore estimated in FY 2023-24.

Investment in PSUs through IEBR ( Figures in ₹ crore)_Revised 2023-2024 __Estimates 2024-25 _
Indian Renewable Energy Development Agency20,496.5925,914.39
Solar Energy Corporation of India858.63585
_(Source - Notes on Demands for Grants, Union Budget 2024-2025) _

Green Energy vs Renewable Energy

Though ‘green energy’ and ‘renewable energy’ are often used interchangeably, one essential difference exists between them. While green energy sources are considered renewable, not all renewable energy sources are considered green. For example, solar power is a green and renewable energy; burning wood is renewable because you can grow more trees, but it is not green, as it pollutes the atmosphere. Green energy is a subset of renewable energy.

Green energy stocks

Green energy stocks are companies involved in developing alternative technologies with renewable resources that emit little to no pollution. The most prevalent sources of green energy include sunlight, wind, and heat. They can also include low-impact hydroelectric sources and specific forms of biomass. Companies that work towards creating no carbon emissions with these resources and reducing the use of fossil fuels are considered green energy companies.

Top performing Green (Renewable) energy stocks

Stock NameMarket Cap (₹ Crore)Share Price on June 14,20245Yrs Return
Adani Green Energy Ltd2,85,917.861,805.004275.76%
WAA Solar Ltd245.44185969.36%
Tata Power1,43,310.98448.5587.36%
SJVN Ltd53,091.53135.1448.07%
(Source- NSE)

Adani Green Energy Ltd

Adani Green Energy Ltd is one of India’s largest renewable energy companies, with a market cap of ₹2,85,917.86 crore and falls under the Adani Group of companies. In the last 5 years, the stock price has grown at a CAGR (Compounded Annualised Growth Rate) of 112%, the topline has seen a compounded growth rate of 35% and profit has seen a compounded growth rate of 36% in the preceding 5 years. The company’s financials have shown turnaround performance with a net loss of ₹475 in FY19 and to net profit of ₹1,260 in FY24.

Suzlon Energy Ltd

The Pune-based Suzlon Energy is a renewable energy solutions provider and is in the business of manufacturing, project execution operation and maintenance of wind turbine generators and sale of related components. It has installed 20+ GW of wind energy in 17 countries and 111+ wind farms with a capacity of 13,880 MW. In the last 5 years, the stock price has grown at a CAGR of 67%, whereas the company's profit has grown at a compounded rate of 20% in the same period. The company has managed to reduce its debt and the company is almost debt free. In FY23 and FY24 the company has reported net profit at consolidated level of ₹2,887 crore and ₹660 crore.

WAA Solar Ltd

WAA Solar Ltd, an Indian holding company, specializes in solar power generation. It invests in Special Purpose Vehicle (SPV) associates and other subsidiaries to establish solar-powered projects. The company is almost debt-free. Over the last five years, the stock's Compound Annual Growth Rate (CAGR) has been 58%, while profit has grown at a rate of 30% during the same period. However, sales growth has shown a negative CAGR of (-)20%. Although hefty interest costs have decreased, the declining sales numbers remain a concern.

Tata Power Ltd

Tata Power is omnipresent in the industry with operations in the field of generation of electricity from thermal and renewable sources, transmission and distribution of electricity & other services like EPC, O&M, etc. The Renewables Segment comprises of generation of power from renewable energy sources i.e. wind and solar and related ancillary services. Over the last 5 years, the CAGR for stock has been 47%. The company’s profit and sales have compounded at a growth rate of 75% and 16%, respectively. In the last 10 years, its profit has grown from ₹12 crore in FY14 to ₹4,280 crore in FY24.


SJVN Ltd, formerly known as Satluj Jal Vidyut Nigam, is an Indian PSU company that produces and transmits hydroelectric power. Presently, the company has 6 operation electricity projects across India with a total capacity of 2017 MW. The 5-year CAGR of the stock has been 40%. The company has been profitable over the years but its sales growth has been muted with the last 5 years' sales CAGR of (-)1%.

Below are the other Green stocks which have outperformed in the last 5 years

Stock NameMarket Cap (₹ Crore)Share Price on June 14,20245Yrs Return
BF Utilities Ltd3,459.21918.35410.48%
Orient Green Power Company Ltd2,084.0421.25401.18%
NHPC Ltd1,02,911.38102.45306.55%
Energy Development Company Ltd107.7322.68284.41%
KPI Green Energy Ltd40,543.131,478.90-
_(Source- NSE) *KPI Green Energy and IREDA are yet to complete 5 years on the Indian bourses _

Expectations from the upcoming full budget in July 2024

India’s ambitious target of 500 GW renewable energy capacity by 2030 and becoming energy self-reliant after that needs a booster dose from the upcoming full-fledged budget. However, February’s interim budget was no short for the renewable sector in any way. The hike in capital allocation to the sector highlighted the strategic vision of the government.

Industry expectations regarding capital expenditure have been met in the interim budget and the status quo on the same is expected to be maintained. Apart from that industry would look for inducement in R&D and transmission capabilities through schemes like PLI, and fiscal incentives in the form of tax relaxation including tax holidays for new setups are anticipated.

The outlook for the green energy sector in India remains positive, driven by an ambitious target of net carbon zero by 2070, technological advancement and growing energy demand with a focus on sustainability.

However technical feasibility like integrating renewable energy into the existing grid infrastructure poses challenges related to intermittency and stability. The green energy sector in India has shown robust financial performance and growth potential. With strong government support, increasing investments, and technological advancements, the sector is well-positioned to play a critical role in India's energy future and economic development.

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