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The Ministry of New & Renewable Energy recently clarified that it has not asked financial institutions to stop lending to renewable energy projects or equipment manufacturers. The clarification came after reports suggested otherwise amid discussions around solar sector overcapacity. The ministry shared that it has only circulated information about current domestic solar PV manufacturing capacities to lenders so they can assess financing proposals more carefully. India has been expanding its renewable energy base rapidly and has already reached 50 per cent of its installed power capacity from non-fossil sources, supported by major policy initiatives and manufacturing incentives.
The Ministry of New & Renewable Energy issued a clarification this past week stating that it has not advised any financial institution to stop lending to renewable energy projects or to companies involved in manufacturing renewable energy equipment. The statement was released after reports suggested that lenders had been asked to pause fresh financing due to concerns regarding overcapacity in the sector. Advertisement
The ministry explained that it had only shared details of India's existing domestic manufacturing capacities in different segments of solar PV production with the Department of Financial Services and key non-banking financial institutions such as PFC, REC and IREDA. This information was circulated so lenders can assess new financing proposals with a clearer understanding of available capacity and market conditions.
According to the ministry, the government remains focused on strengthening India's domestic solar PV manufacturing ecosystem and positioning the country as a significant participant in the global supply chain. This effort is supported by multiple initiatives, including the Production-Linked Incentive (PLI) Scheme for high-efficiency solar modules and policy measures intended to offer Indian manufacturers a fair operating environment.
These initiatives have contributed to a sharp rise in solar module manufacturing capacity, which has grown from 2.3 GW in 2014 to about 122 GW currently listed in the Ministry's Approved List of Models and Manufacturers (ALMM). The ministry added that it will continue working with industry stakeholders to maintain momentum in India's renewable energy expansion and ensure that the sector remains competitive and future-ready.
India has also made notable progress toward its climate commitments. The country has already achieved 50 per cent of its installed power capacity from non-fossil fuel sources five years earlier than the target under its Nationally Determined Contributions to the Paris Agreement. As of the end of October 2025, non-fossil energy capacity stands at approximately 259 GW, with 31.2 GW added during the ongoing financial year.
Source PTI
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