Solar PV capacity grew by 50 percent to reach more than 74 GW past year and it was the first time solar PV additions rose faster than any other fuel, surpassing the net growth in coal.
The agency added that it expects more than 920GW of clean power to be installed by 2022, an increase of 43%.
Newly appointed Power and New and Renewable Energy minister Raj Kumar Singh announced last month that he has instructed that 20,000MW each of wind and solar power contracts be auctioned by December. "The growth in renewable generation will be twice as large as that of gas and coal combined", said the report.
It also said that the power from these projects will be supplied to obligated entities "for the fulfilment of their non-solar renewable purchase obligation at a pooled price of capacity selected".
However, the IEA has said that despite these encouraging figures, there are uncertainties ahead.
Modest growth is expected in the European Union given that the policy landscape after 2020 is not expected to encourage industry investment.
According to Renewables 2017, the renewable sector is estimated to grow at a rate of 12% this year, which is higher than IEA's forecast last year.
Additions of solar PV grew faster than any other fuel and surpassed the net growth in coal, the IEA added. "For the next five years, solar PV represents the largest annual capacity additions for renewables, well above wind and hydro".
The recognition in China dominating PV installations, which accounted for around 50% of total in 2016 was another positive but the IEA claimed that the "growing cost of renewable subsidies and grid integration issues remain two important challenges to further expansion". The IEA report found that China accounted for nearly half of 2016's global solar PV expansion, with data showing a similar story this year.
Misjudged the huge increases in solar power, forecasting less than 1 gigawatt (GW) of installed solar by 2016 when the total was 46 times that amount, and no more than 18 GW of wind power, when it reached 82 GW - a almost five-fold increase. And for the first time in USA history, wind and solar energy made up more than 10 percent of all monthly electricity generation. Biofuels will still account for over 90% of renewable energy in road transport by 2022. China alone is expected to be responsible for 40 per cent of renewable capacity growth in the next five years, while India will double its renewable electricity capacity by 2022.