The Pew Charitable Trusts, in its "Who's Winning the Clean Energy Race 2011," says India invested $10.2 billion in renewable energy last year, nearly 40 percent of which was for solar power.
The Pew report credited India's National Solar Mission, with its aim to have 20 gigawatts of solar power installed by 2020, as helping to drive the country's seven-fold jump in solar investments in 2011, to $4.2 billion and an additional 2.8 gigawatts of solar capacity installed.
"On a number of measures, India has been one of the top-performing clean energy economies in the 21st century, registering the fifth highest, five-year rate of investment growth and eighth highest in installed renewable energy capacity," Phyllis Cuttino, director of Pew's Clean Energy Program, said in a statement.
"The country holds great potential in the Asia/Oceana region and will continue to be a top destination for private investment this year," she said.
India's clean energy sector -- half of which consists of wind energy -- grew the second fastest in the past year, after Indonesia's, the report says.
The country has 22.4 gigawatts of installed clean energy generating capacity.
Clean energy investment in India, not including research and development, has increased 600 percent since 2004, bolstered by national policies that foster market certainty, Cuttino said.
Yet India's Infrastructure Development Finance Company says only about one-sixth of India's renewable energy resources have been tapped, leaving a huge potential for market growth.
The U.S. government's Overseas Private Investment Corporation recently approved $250 million in financing to India, through IDFC, to expand renewable energy and infrastructure lending.
"India's renewable energy industry has grown by leaps and bounds these past few years," said OPIC President and Chief Executive Officer Elizabeth Littlefield, in announcing the financing last month, adding that India needs long-term financing to reach its green energy potential.
In a related development, France's AREVA Solar said Wednesday it will build a 250 megawatt concentrated power installation for India's Reliance Power Limited, the largest in all of Asia.
AREVA says the project in Rajasthan, already under construction and expected to be operational by May 2013, will be the largest solar station in Asia.
"AREVA is delighted to help deliver on the promise of India's progressive solar energy goals," AREVA Chief Executive Officer Luc Oursel said in a statement.