As the world grapples with the escalating effects of climate change, the drive toward sustainable energy solutions has become even more important and rapid.
India, as one of the fastest-growing major economies, faces the dual challenge of meeting increasing energy demands while combating environmental degradation.
For this, green energy companies play a very crucial role and this makes stocks of these companies popular choice among investors.
In this blog, we will explore why for an investor green energy stocks are worth putting their investment into.
The Surge in Renewable Energy Demand
India is witnessing an exponential increase in its energy demands which are expected to touch 817 GW by 2030.
With a limited reliance on fossil fuels, India is actively pursuing renewable energy sources to meet its growing energy demands aligning with its environment sustainability resolutions. The country does not heavily depend on fossil resources for its needs and is searching for renewable power sources.
India aims to achieve 500 GW of non-fossil fuel capacity by 2030, a goal India set for itself during the COP26 climate summit.
With India’s population exceeding 1.4 billion, the demand for cleaner alternatives is expected to create a booming market for renewable energy hence making green energy stocks an attractive investment opportunity for investors.
Also Read: Best Green Energy Stocks for Sustainable Growth in India
Government Support and Policies
The Indian government is amplifying its commitment to green energy through supportive policies, incentives, and subsidies.
Several schemes like the National Action Plan on Climate Change (NAPCC), National Solar Mission(NSM), Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), etc. are launched by the Indian government to foster domestic production of energy from renewable sources.
The latest Budget 2024-25 has allocated Rs 191 billion for the Ministry of New and Renewable Energy. Such strong governmental backing reassures investors that the green energy sector has government support and it is part of their national development plan enhancing the attractiveness of green energy stocks.
Increasing Investments in Green Energy
Investment in green energy is witnessing exponential growth. In 2023, India’s clean energy investments reached USD 68 billion, up nearly 40% from previous years.
Additionally, a financing pledge of USD 386 billion has been committed by banks and financial institutions to support India’s transition to renewable energy. These figures demonstrate the confidence and momentum in the green energy market, signaling a robust foundation for new investors.
Technological Advancements Lowering Costs
Technological innovations are making renewable energy sources increasingly viable. The cost of solar energy has declined by over 85% in the last decade. This declining cost trend allows renewable energy companies to compete more effectively against traditional fossil fuels.
In many instances, new solar installations in India are starting to offer electricity at much cheaper rates than coal-generated power. This competitive edge makes investments in green energy stocks more appealing and sustainable.
Market Potential and Long-Term Growth
The market for renewable energy in India is projected to expand substantially, with estimates indicating that investments in this sector could reach USD 80 billion by 2030.
Additionally, the rollout of electric vehicles (EVs) is expected to accelerate, with the Indian EV market projected to reach USD US$ 113.99 billion by 2029, growing at a compound annual growth rate (CAGR) of 66.52%.
As various sectors such as transportation, agriculture, and manufacturing make green transitions, companies positioned at the forefront of renewable energy developments will likely reap the rewards.
The rise of electric vehicles and the emphasis on green hydrogen further contribute to the growth potential, allowing for diverse opportunities within this investment category.
Environmental and Social Responsibility
Investing in green energy stocks not only aligns with financial ambitions but also fosters goodwill by contributing to environmental sustainability.
According to the Indian Government, the country aims to reduce its GDP emissions by 45% from 2005 levels by 2030, alongside generating 50% of its energy needs from renewable sources.
With India’s commitment to reducing carbon emissions and promoting cleaner air, investors are increasingly attracted to companies that align with these values.
As the global consumer market shifts toward environmentally conscious brands, green energy investments may gain additional momentum from socially responsible investing trends.
Conclusion
Green energy stocks present a compelling investment opportunity in India, characterized by growing demand, governmental support, technological advancements, and long-term growth potential. With ambitious national targets and increasing investments, the green energy market is primed for expansion.
Investing in green energy stocks is not just a financial decision. It’s a step toward creating a sustainable future. Start exploring investment opportunities today and be part of the green revolution.
