Chennai: Bank lending to India’s renewable energy sector has surged over the past two years, growing faster than credit to other priority-sector categories, according to RBI data.Outstanding credit to renewable energy projects under the Priority Sector Lending (PSL) framework rose from Rs 6,825 crore as of July 26, 2024, to Rs 16,014 crore by July 31, 2026 – an increase of 2.3 times in just over two years. The growth trajectory has been steep and sustained, with outstanding credit rising to Rs 10,325 crore by March 2025, Rs 12,160 crore by July 2025 and Rs 13,011 crore by March 2026, before crossing the Rs 16,000-crore mark this July.Credit to renewable energy jumped 78.2% in the 12 months to July 2025. While growth moderated thereafter, it still rose a robust 31.7% in the year to July 2026 — the highest growth rate among all priority-sector categories in the RBI data, ahead of segments such as micro and small enterprises, medium enterprises, housing, agriculture and education. Renewable-energy credit also grew 23.1% between March and July 2026, ahead of other segments.Despite the rapid growth, renewable energy remains one of the smaller categories within priority-sector lending, compared with agriculture, which had outstanding credit of Rs 27.3 lakh crore, and micro and small enterprises, at Rs 30.9 lakh crore, as of July 2026. The growth trend, however, suggests increasing lender appetite for the renewable energy sector, amid policy support, falling technology costs and growing investor confidence in solar, wind and other clean-power projects.India’s total installed non-fossil fuel-based electricity generation capacity has crossed 300 GW, taking the country past 60% of its 500 GW capacity target for 2030.A recent SBI Research report proposed expanding priority-sector lending support for the clean-energy sector to align with the country’s Viksit Bharat 2047 ambitions. It recommended that the RBI raise the eligible loan ceiling for renewable-energy projects from the current Rs 35 crore to Rs 100 crore. For individuals, it suggested raising the limit for loans for rooftop solar plants from Rs 10 lakh to Rs 2 crore.
