The debilitating power crisis that crippled north India this summer, with New Delhi experiencing five-hour power cuts daily, has once again pointed up the severe need for Asia's third largest economy to harness its underutilized solar power, improve people’s access to electricity and remove bottlenecks that scupper its economic growth.

Fortuitously, with a more supportive policy environment under the Narendra Modi administration and the renewable energy potential that exists in the country, a raft of companies from global conglomerates such as GE to Indian corporate giants such as the Tatas, Aditya Birla Group, Adani Group, Reliance Industries Ltd and Mahindra Group as well as mint-fresh start-ups are scrambling to get onto the renewable energy sector bandwagon.

India needs renewable energy to cater to spiralling demand. Currently more than 400 million Indians remain without access to power. With demand likely to double by 2020, mainly due to an exponentially growing 300-million strong middle class, and Modi's focus on manufacturing in the economy (as encapsulated in his recently-launched "Make in India" campaign), India's power generation capacity will be stretched to the limit.

According to Abhishek Pratap, Senior Campaigner Greenpeace India, within the last decade Delhi’s electricity demand has risen by an average 6 percent every year. From 20 billion units in 2002, the demand in all likelihood will reach over 33 billion units by 2017, 65 percent growth.

"This poses a fundamental question of how to ensure a consistent electricity supply," says Pratap in the foreword to a report 'Rooftop Revolution' by Greenpeace. Be that as it may, there is no denying India’s potential which India holds. A report, the Renewable Energy Status Report 2014, released in July, estimated the renewable energy potential from various sources in India at 2,49,188 MW, against an untapped market of 2,16,918.39 MW.

According to K. Ramanathan, Distinguished Fellow, Tata Energy Research Institute, New Delhi, India's energy requirements necessitate an inclusive approach to harness all forms of energy to produce power.

"A judicious mix of fuels in the country's energy portfolio is pivotal to powering India's growth story. This is also necessary because renewable energy – especially wind and solar – remain largely seasonal options,” he said. “This is compounded by the fact that India has very little capacity to store such power for future use.”

However, critics point out that the country's regulatory climate is hardly conducive for either power generation or foreign investment in the sector. This has much to do with the fraught India-US civil nuclear agreement signed in 2005 by the George W. Bush administration and the Congress-led United Progressive Alliance (UPA) dispensation headed by Manmohan Singh.

Hailed as a "path-breaking achievement" at the time, the agreement had the US lobbying for a controversial international push to provide India access to nuclear fuel and technology for the first time in 35 years. New Delhi aimed to make private US companies– and in future private Indian companies–stakeholders in an ambitious expansion drive for nuclear power generation. A raft of new nuclear reactors were to come up with American help to whittle down the strains resulting from erratic and expensive power supply. However, regulatory obstacles have choked the nuclear agreement leading to frustration in both camps.

With most days of uninterrupted sunshine, energy experts say India is a solar energy paradise. “Traditional energy sources have faced serious challenges for the past three or four years which has pushed developers towards renewable energy,“ says a senior official at the ministry of power. "We're encouraging long-term businesses to build power projects that will run and operate efficiently and profitably."

In a recent interview, Union minister of state for power Piyush Goyal said the BJP-led administration expects US$100 billion to be invested in India's renewables in the next four or five years.

“I am getting an excellent response from a number of companies, including those from Australia, Japan and the US...they are excited about the prospects in this sector,” he said.

Goyal also stated that the Union ministry of new and renewable energy has revised its target of achieving overall capacity of 41,000 MW in the next three years, which creates a market of US$10.51 billion.

Businesses appear to be heeding Goyal's call. India's richest person, industrialist Mukesh Ambani, promoter of Reliance India Ltd, has its wing, Reliance Solar, tapping both upstream clean energy products such as home lighting systems and solar lanterns as well as products used in building renewable energy plants. Gautam Adani, Chairman and founder of the US$8-billion Adani group, whose businesses straddle diverse sectors such as coal mining and oil & gas exploration, plans to build over 20,000 MW capacity in power by 2020. It inaugurated its first solar project in 2012, and is now eyeing a pan-India expansion.

Investors too are moving in. The World Bank’s IFC and specialty investors such as Berkeley Energy are willing to provide financing. Plummeting prices are making the sector more investor-friendly. With the government making a firm push to promote renewable power-tax rebates, focused schemes, and possibly fixed tariffs instead of competitive bidding for solar power, the excitement in the sector is only expected to grow.

Cash-rich conglomerates have begun making sizeable investments in the business. The US$100-billion Tata Group, for example, expects to get 20-25 percent of its generation from renewable sources in three years. In February this year, it acquired a 40 MW wind farm in Gujarat. Two years ago it had bought one in Maharashtra.

Modi, himself an advocate of solar power, who has also penned a book, 'Convenient Action: Gujarat's Response to Challenges of Climate Change' on the subject, inaugurated the 151 MW solar plant of Welspun Energy, the largest in the country, in his home state of Gujarat earlier this year. Welspun Energy is one of the most ambitious investors in clean energy, with plans to invest some US$2.5 billion in clean energy.

Despite the building momentum, energy experts point out that India's solar energy sector still needs to iron out a lot of creases before it becomes an integral part of the country's energy basket. Since power is a concurrent subject, conflicts between states and the centre are only expected to spiral increasingly. Regulation is still opaque in this area, with questions over legality and pricing of many of these projects still ambiguous.

Clearly, it is early days yet for investors in the renewable energy space to feel elated, but given a fortuitous mix of factors, the sun is at last shining on a sector hitherto defined as an area of darkness.

Neeta Lal, a New Delhi-based editor and journalist, has been nominated for this year's Global Media Summit Awards for Editorial Excellence instituted by the BBC, Reuters, Kyodo and Xinhua news agency. Follow her on twitter: neeta lal@neeta_com