Renewable sources of energy are taking a completely different direction, and India is leading this trend. As the cost of solar power decreases, India could change the game in the solar energy sector. In a year, India receives about 300 days of sunshine. It could help in capturing and using solar energy effectively.
This has created an opportunity for investors as the demand for solar energy has increased dramatically, making solar energy stocks attractive. This is easily noticeable from solar stock surges, which have increased up to 1,318% as of May 2024 in only one year.
India’s solar power revolution
India’s first steps into solar began with the National Solar Mission in 2010.
India has set an ambitious goal to hit 500 GW of clean energy capacity by 2030, with wind energy contributing 140 GW and solar energy leading the charge at 280 GW.
This signifies India’s goal to be at the forefront of clean tech manufacturing, with an estimated annual investment between US$350-400 billion by 2030, which provides great opportunities for global investors in the Indian solar market.
Expected to grow at a CAGR (compound annual growth rate) of 22.7% between 2023 and 2027, India aims to have an installed capacity of approximately 185.6 gigawatts (GW) by 2027, increasing up to 364.6 GW by 2023, under NEP14 norms.
Source: IBEF
In line with that commitment, several initiatives have been launched by the Ministry of New & Renewable Energy to uplift the domestic manufacturing sector.
For example, the PM-KUSUM scheme, PM Surya Ghar Muft Bijli Yojana and Pradhan Mantri Suryodaya Yojana are some programmes that enhance local modules adoption, thus boosting indigenous manufacturing capacities development.
Also read: The renewable energy industry in India: A game-changer for the environment
Why solar stocks?
Investing in solar stocks in India or solar sector stocks could be a great idea:
High potential: The Indian solar power market is projected to witness exponential growth in the coming years, translating to potential gains for investors in solar companies.
Transiting towards green energies: As the globe moves towards green energies, firms engaged in this business may benefit a lot from this transformation occurring at all levels.
Diversification: Solar stocks will diversify any investment portfolio and provide access to an industry with high growth rates not tied to traditional sources of energy.
Sustainability: When people invest their money in solar stocks, they help build sustainable futures by supporting the development of clean energy infrastructure.
Top solar stocks in India
Here are some top solar stocks in India:
1. Tata Power
Tata Power Solar Systems Limited – a subsidiary of Tata Power, is one of the solar energy stocks in India.
The firm provides the following:
- Solar infrastructure,
- Solar cell and module manufacturing, and
- Engineering, Procurement, and Construction, i.e., EPC services for solar projects.
By the way, this company is quite a thing in the solar rooftop business – their market share accounts for over 13.1%. Besides, they have active participation in a government program (PM Surya Ghar Yojna) whose aim is to provide solar power to households in the country.
Going forward, management strategies and reduction in cell and module prices are expected to drive margin improvements for the company’s solar rooftop business.
Also read: Inside Tata Motors’ Q4 results 2024: Key insights
2. Adani Green Energy Ltd
Adani Green Energy Ltd (AGEL), an arm of Adani Group – is a solar power generation company. Adani Green Energy Ltd is India’s largest renewable energy player. It is also the biggest developer of solar PV in the world. Adani has the ambition to build a renewable energy plant of 30,000MW that would be the first of its kind and be located in Khavda, which is predicted to be done by 2029.
Adani Green intends to increase its current solar manufacturing capacity from 4GW to 10GW in the following years, which will lead to the company’s growth and also to the green addition of the planet.
Must read: Disrupting the disruptors: Adani Group enters digital payments race
3. KPI Green Energy Ltd
KPI Green Energy, a renewable energy conglomerate based in Gujarat, was established in 2008 to develop, build, maintain and operate solar plants. Under the brand ‘Solarism’, they are an Independent Power Producer (IPP) and service provider to Captive Power Producers (CPPs), managing renewable power facilities such as solar and wind-solar hybrid projects.
They recently procured a 305 MW solar project from Aditya Birla Renewables and have an order book of more than 1.23 GW. The company is targeting 1000 MW by 2025. Growth opportunities for KPI Green Energy include hybrid projects, strategic land acquisitions, timely project execution and robotic panel cleaning for cost-saving purposes.
4. Waaree Renewable Technologies Ltd
Waaree Renewables Technologies Ltd, which was established in 1999, has focused on the production of electricity using sources of renewable energy and also consultancy services. It prides itself on being one of India’s biggest vertically integrated new energy companies, with 12 GW solar panel manufacturing capacity at Chikhli, Surat and Umbergaon, Gujarat.
The number of successfully installed solar projects by the company exceeds 10,000, with total operating capacities exceeding 600 MW. As a solar developer, Waaree finances, constructs and owns apart from running solar projects, thereby showing its dedication to environment preservation through renewable energy solutions.
5. Suzlon Energy Ltd
Suzlon Energy is yet another solar panel stock in India. Operating in 17 countries, Suzlon is adamant about leading the world to a greener future through its expertise in renewable energy systems.
The company initially focused on wind but later, in 2016, extended its product offering to solar. By 2016, the annual capacity of Suzlon’s solar plants was 340 MW.
Suzlon has been in charge of the whole process, from land acquisition to power evacuation, and has finished the development of large wind and solar parks. By using its expertise in power production and working with state utilities, Suzlon is going to build solar-wind systems combined with storage projects in a good way.
Here is a quick snapshot of the financials of solar stocks:
| Tata Power | Adani Green Energy Ltd | KPI Green Energy Ltd | Waaree Renewable Technologies Ltd | Suzlon Energy Ltd | |
| Market Cap (₹ crores) | 144253.69 | 286868.25 | 10979.05 | 21073.60 | 67400.77 |
| P/E | 41.00 | 227.18 | 67.84 | 142.34 | 94.45 |
| ROE (%) | 11.51 | 17.07 | 29.61 | 93.28 | 28.45 |
| ROCE (%) | 11.27 | 9.81 | 21.63 | 103.31 | 24.70 |
| Debt to Equity | 1.66 | 8.65 | 1.24 | 0.18 | 0.04 |
| 3-year sales CAGR (%) | 23 | 43 | 116 | 307 | 25 |
| 3-year profit CAGR (%) | 45 | 68 | 95 | 303 | 45 |
Conclusion
India’s going big on solar power! They are setting ambitious goals, making it easy for companies to invest in solar, and the industry is booming.
This is a great chance to invest in companies that are focusing on solar projects and are leading the charge. By investing, you are helping India fight climate change. But remember, investing requires you to do your research and analyse the company’s financials.
