China has recently cancelled more than 100 coal based power generation planned or under construction projects with 120 gigawatts capacities. China is focusing on renewable energy given the pollution the country faces.
Solar followed by wind are two major sources for renewable energy. However yearly global investments into renewable energy capacity projects (excluding hydro) was down 22% to USD 227 billion in 2016 against USD 293 billion in 2015. Sharp fall in equipment prices such as solar photovoltaics and two major markets, China and Japan, focussing on efficiently utilising already built capacity and sharp fall in crude prices kept renewable energy global investments low in year 2016.
In 2015, India revised its renewable energy target to 175 GW by 2022, 57% solar, 34% wind and other sources the rest. Since 2012, India has increased cumulative renewable energy capacity at CAGR of 18% from 24 GW to 46.33 GW. Going forward, if India wants to achieve its target of 175 GW by 2022, it needs to add capacity at CAGR of 31% every year, implying huge need for investments. As of 2016 India has 15% of total installed power generation capacity of 307.69 GW in renewable energy.
Total FDI equity inflow in the renewable energy field was USD 1.77 billion in the April 2014-September 2016 period.
In order to achieve its target of 175 GW by 2022, government of India needs to give financial and fiscal incentives for promoting renewable energy projects.
A few ways to invest in renewable energy assets are
Asset finance: Money invested in renewable energy generation projects through internal company balance sheets, from loans, from debt or equity capital. Globally asset financing is the major contributor to investments
Venture capital and private equity: Investments by these entities to developing renewable energy technology and setting up efficient capacities.
Public financial markets: Investment in the equity of publicly traded companies in renewable energy technology and clean power generation.
Mergers and acquisitions: Valuing existing equity and debt bought by potential investors to achieve synergy developing and operating renewable energy technology.