South Asia renewable energy market is expected to grow at a CAGR of more than 12.5% in the forecast period of 2020-2025. Geographically, South Asian countries are located in a region of tropical and humid climatic conditions, which provides the region with an opportunity to avail of huge potential for renewable energy resources. Factors such as growing population, rising incomes, and rapid rate of urbanization have boosted the consumption levels for energy and other resources across the region and are resulting in a growing need for power. The efforts of the governments in the region to obtain maximum energy from renewable energy sources and to reduce carbon emissions are expected to be the significant contributors to the market growth. However, high-cost requirement and high dependence on the prevailing weather condition is likely to restrain the growth of the market.

  • Solar energy in South Asia is expected to have significant growth in the market as solar energy prices continue to fall during the forecast period.
  • South Asian developing countries are looking into inexhaustible and repeatable alternative energy sources such as solar, wind, hydro and bioenergy. Renewable power technologies offer substantial opportunities for future cost reductions as domestic markets mature. In addition, countries like Bangladesh and Nepal are expected to provide opportunities for growth of the market in the near future.
  • India is expected to dominate in the South Asia renewable energy market during the forecast period owing to a large renewable energy installed capacity.



Key Market Trends

Solar Energy is Expected to Witness Significant Growth in the Market

  • South Asia has seen particularly strong growth, with more than 1.2 million off-grid solar lighting products sold in the second quarter of 2018, mainly in India and Bangladesh.
  • Commercial and industrial customers have driven the growth of solar energy in the region. Factors such as the decline in the Levelized Cost of Electricity (LCOE) for rooftop solar and favorable policies and corporate social responsibility programs are expected to drive the solar energy market in the region during the forecast period.
  • In South Asia, India added about 96.03 GW of solar PV during 2015-2019 and had an installed solar capacity of 36.98 GW in 2019 showing a huge growth rate. The country is focused on installing solar rooftop systems to achieve its ambitious solar PV targets.
  • Bangladesh has an estimated 1.14 GW of solar PV potential, and as of 2019, the country had 283.6 MW of installed capacity and a further was under construction. The government plans to install rooftop systems on all educational institutions to feed additional solar power to the grid.
  • Pakistan holds 1.33 GW of installed solar PV capacity in 2019. Sri Lanka had 250 MW of installed capacity in 2019, motivated in part by the accelerated solar rooftop Programme. Therefore, solar energy is expected to have significant growth in the market during the forecast period.



India is Expected to Dominate the Market

  • South Asia is a stronghold of renewables deployment in the Asia-Pacific region. In India, the government’s efforts to put in place supportive policy conditions were a major factor contributing to the increase in the country’s renewable energy capacity to 128.2 GW in 2019.
  • India’s renewable targets have been supported by fiscal instruments such as generation-based incentives, capital and interest direct public financing, viability gap funding, concessional finance, and fiscal incentives.
  • Rooftop solar was India’s fastest growing renewable energy market in the 2018-19 FY, adding a record 1.8 GW for a total capacity of more than 4 MW across the commercial, industrial and public sectors and residential projects, or 14% of the cumulative solar installation in India.
  • India has plans to obtain 40% of installed power generation capacity from clean energy sources by 2030 and to reach 175 GW by 2022, including 100 GW solar, 60 GW wind, 10 GW bio-power, 5 GW small-scale hydro.
  • The ongoing renewable energy projects financed by the World Bank, and ADB in India are of a count of 6 active projects with a total commitment of around USD 1398 million financed by World Bank and 39 active projects financed by ADB. Therefore, with the upcoming and ongoing renewable energy projects, India is expected to dominate in the market during the forecast period.



Competitive Landscape

The South Asia renewable energy market is fragmented. Some of the major companies include ReNew Power Limited, Greenko Group Plc, ACME Solar Holding Limited, Tata Power Solar Systems Ltd, and Suzlon Energy Ltd.

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