India stands at a pivotal juncture in its energy transition, driven by an escalating demand for power, a commitment to climate change mitigation, and the strategic imperative of energy security. With one of the world’s fastest-growing major economies, the nation’s energy consumption is projected to rise significantly in the coming decades. Recognizing the unsustainable nature of a fossil-fuel-centric growth model and the geopolitical vulnerabilities associated with imported energy, India has embarked on an ambitious journey to decarbonize its energy mix, with renewable sources playing the central role. This shift is not merely an environmental obligation but a multifaceted strategy to foster economic growth, create employment, reduce air pollution, and ensure universal energy access, particularly in rural and remote areas.

The last decade, particularly the period from 2014 onwards, has witnessed unprecedented momentum and transformational changes within India’s renewable energy sector. From modest beginnings, the country has rapidly scaled up its renewable energy capacity, making it one of the largest and fastest-growing markets globally. This progress is a testament to proactive policy frameworks, technological advancements, falling costs, increased investment, and a growing domestic manufacturing ecosystem. India’s strategic targets, initially 175 GW by 2022 and subsequently an even more ambitious 500 GW of non-fossil fuel-based energy capacity by 2030, underscore the scale of its ambition and the urgency driving its renewable energy agenda. This trajectory positions India as a global leader in renewable energy deployment, demonstrating how a developing nation can simultaneously pursue economic development and environmental sustainability.

Accelerating Capacity Addition and Diversification

The most significant and tangible progress in India’s renewable energy sector is the exponential growth in installed capacity. As of early 2024, India’s total installed renewable energy capacity (excluding large hydro) has crossed the 135 GW mark, with another significant pipeline of projects under various stages of implementation. When large hydro, which was reclassified as renewable in 2019, is included, the total non-fossil fuel capacity significantly exceeds 180 GW, representing a substantial portion of the nation’s overall power generation capacity. This growth has been predominantly driven by solar and wind power, which collectively account for the lion’s share of new additions.

Solar power has emerged as the frontrunner, experiencing an unprecedented boom. From merely a few GWs a decade ago, solar capacity has surged past 80 GW. This rapid expansion is primarily attributed to utility-scale solar parks, which have capitalized on abundant sunlight and competitive bidding processes that have driven tariffs to record lows. Projects like the Bhadla Solar Park in Rajasthan (over 2.2 GW) and the Pavagada Solar Park in Karnataka (2.05 GW) are illustrative examples of India’s commitment to large-scale solar deployment, ranking among the world’s largest. Beyond utility-scale, significant progress has been made in rooftop solar, supported by schemes such as the Grid-Connected Rooftop Solar Programme, which offers central financial assistance. The government’s renewed focus on distributed generation and consumer participation, particularly through initiatives like the Pradhan Mantri Suryodaya Yojana, aims to further democratize solar energy and ease grid burdens.

Wind energy, historically a strong performer for India, has also contributed substantially to the growth. India ranks among the top five wind power producers globally, with an installed capacity exceeding 45 GW. While the pace of wind capacity addition saw some fluctuations following the transition from a feed-in tariff (FiT) regime to competitive bidding, recent policy clarifications and improved tendering mechanisms have helped stabilize growth. States like Tamil Nadu, Gujarat, Karnataka, and Maharashtra continue to lead in wind power generation, leveraging their favorable wind resources. There is also a nascent but growing interest in offshore wind potential, with initial surveys and policy frameworks being developed to harness the vast resources along India’s coastline.

Beyond solar and wind, other renewable energy sources have also witnessed progress. Bio-power, including biomass and bagasse co-generation, has maintained a steady presence, contributing around 10 GW. Initiatives like the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme are promoting compressed biogas (CBG) production from agricultural residue and municipal waste, fostering a circular economy and addressing pollution concerns. Small hydro projects (up to 25 MW) add another 5 GW to the renewable mix. The reclassification of large hydro projects (over 25 MW) as renewable energy sources in 2019 was a significant policy decision, bringing an additional 46 GW under the renewable umbrella and facilitating easier access to financing and incentives, thereby supporting grid stability through a reliable, dispatchable source.

Robust Policy and Regulatory Framework

The remarkable progress in India’s Renewable Energy sector is inextricably linked to the robust and evolving policy and regulatory ecosystem fostered by the government. The Ministry of New and Renewable Energy (MNRE) has been instrumental in conceptualizing and implementing a diverse array of schemes and policies designed to attract investment, reduce risks, and facilitate deployment.

One of the most impactful policy instruments has been the competitive bidding regime for solar and wind projects. The reverse auction mechanism has led to aggressive tariff reductions, making renewable energy increasingly cost-competitive with conventional power sources. Solar tariffs, for instance, have plummeted from double-digit rupees per unit a decade ago to sub-₹2.50 per unit in recent auctions, making solar power the cheapest source of new electricity generation in many parts of the country. This competitive pricing has boosted adoption and integration into the national grid.

The government has also reinforced supportive regulations such as Renewable Purchase Obligations (RPOs) for distribution licensees and captive power plants, mandating them to source a certain percentage of their electricity from Renewable Energy sources. While enforcement of RPOs has been a persistent challenge, their existence provides a long-term demand signal for renewable energy developers. Furthermore, the “must-run” status granted to renewable power projects ensures that they are not curtailed due to grid issues, guaranteeing revenue streams for project developers.

To address land acquisition challenges, a major hurdle for large-scale projects, the government has promoted the development of “Ultra Mega Renewable Energy Power Parks” (UMREPPs) or solar parks. These designated zones come with pre-identified land, transmission infrastructure, and regulatory clearances, significantly de-risking project development and accelerating deployment. The Green Energy Corridors (GEC) project, a dedicated transmission infrastructure to evacuate renewable power from generation-rich states to load centers across the country, is a critical enabler, addressing grid integration challenges.

Financial incentives, though selectively applied, have played a crucial role. Accelerated depreciation benefits, customs duty exemptions on certain equipment, and viability gap funding (VGF) for specific technologies have supported the sector. More recently, the Production Linked Incentive (PLI) scheme for high-efficiency solar PV modules is a game-changer, aiming to build a vertically integrated domestic manufacturing ecosystem for solar PV, from polysilicon to modules. This scheme, with an outlay of nearly ₹24,000 crore, is designed to reduce India’s reliance on imports, foster self-reliance (Atmanirbhar Bharat), and create significant manufacturing jobs.

Strengthening Domestic Manufacturing and Supply Chains

A significant recent development has been India’s strategic pivot towards boosting domestic manufacturing capabilities within the Renewable Energy sector. Historically, India has been heavily reliant on imports for critical components, particularly solar cells and modules, primarily from China. This dependence posed risks to energy security and economic stability. The “Make in India” initiative, coupled with specific policy interventions, is now actively transforming this landscape.

The PLI scheme for solar PV manufacturing, launched in 2021 and subsequently expanded, is at the forefront of this effort. It incentivizes large-scale, high-efficiency solar PV module manufacturing in India, covering the entire value chain. Major Indian conglomerates have committed substantial investments under this scheme, with plans to establish integrated facilities for ingots, wafers, cells, and modules. This is expected to add tens of GWs of integrated solar manufacturing capacity over the next few years, significantly reducing import dependence and fostering technological advancement within the country.

Similar efforts are underway in the wind sector, though less pronounced, focusing on components and turbine manufacturing. India already has a strong base for wind turbine manufacturing, with several global and domestic players having production facilities. The emphasis is now on scaling up and integrating more advanced technologies. This push for domestic manufacturing not only ensures supply chain resilience but also creates a significant number of skilled and semi-skilled jobs, contributing to economic growth. The long-term vision is for India to become a global hub for renewable energy manufacturing and a net exporter of related technologies and equipment.

Advancements in Grid Integration and Storage

The rapid influx of intermittent renewable energy into the national grid necessitates significant advancements in grid infrastructure and management. India has made substantial progress in this area, transitioning from a localized, siloed approach to a more integrated and smarter grid system.

The Green Energy Corridors (GEC) project is fundamental to this progress. Phase I and II of the GEC aim to build dedicated transmission lines and substations to evacuate approximately 20 GW of renewable power from key generation hubs. This infrastructure reduces transmission losses, enhances grid stability, and enables the efficient flow of clean energy across states. Smart grid pilot projects, leveraging digital technologies for real-time monitoring, forecasting, and demand-side management, are also being implemented to enhance grid reliability and efficiency.

Energy storage solutions are critical for addressing the intermittency of solar and wind power, enabling grid balancing and peak load management. While grid-scale battery energy storage systems (BESS) are still relatively expensive, India has begun to integrate them into power purchase agreements and tender designs. The Solar Energy Corporation of India (SECI) has floated tenders for large-scale battery storage projects, often bundled with renewable generation, signaling a clear intent to scale up deployment. Pumped-hydro storage projects are also gaining renewed attention, with several large projects planned or under construction, leveraging India’s vast topographical potential for large-scale energy storage.

Furthermore, forecasting and scheduling mechanisms for renewable energy have matured significantly. Grid operators utilize advanced meteorological data and machine learning algorithms to predict renewable power generation with greater accuracy, allowing for better planning and dispatch of conventional power sources, thus minimizing grid imbalances. The introduction of ancillary services and real-time markets by the national load dispatch center (POSOCO) further facilitates dynamic grid management and the integration of higher renewable energy penetration.

Decentralized Renewable Energy and Energy Access

Beyond large-scale grid-connected projects, India has made significant strides in promoting decentralized renewable energy (DRE) solutions, particularly for improving energy access in remote and underserved areas. DRE technologies, such as solar mini-grids, off-grid solar home lighting systems, and solar water pumps, have played a transformative role in improving the quality of life and fostering economic activities in rural India.

The Pradhan Mantri Kisan Urja Suraksha evem Utthaan Mahabhiyan (PM-KUSUM) scheme is a flagship initiative focusing on solarizing the agricultural sector. It aims to deploy 10 GW of decentralized ground-mounted grid-connected solar power plants, install 2 million standalone solar pumps, and solarize 1.5 million grid-connected agriculture pumps. This scheme not only provides reliable and affordable power for irrigation, reducing dependence on diesel pumps and subsidized grid electricity, but also offers farmers an additional income source by selling surplus solar power back to the grid.

Solar mini-grids have emerged as a viable solution for villages that are difficult or uneconomical to connect to the main grid. These mini-grids provide reliable, high-quality power for homes, schools, health centers, and small businesses, fostering local economic development. Government support, coupled with private sector innovation and financing, has accelerated the deployment of such systems. This decentralized approach aligns with India’s goal of universal energy access and contributes to reducing carbon emissions at the local level.

Attracting Investment and Financial Innovation

The robust policy environment and the burgeoning market potential have made India an attractive destination for Renewable Energy investments, both domestic and foreign. Large domestic players, including public sector undertakings like NTPC and SECI, along with major private sector conglomerates, have made significant commitments to expand their renewable energy portfolios. International institutional investors, sovereign wealth funds, and private equity firms have also poured billions of dollars into Indian renewable projects, recognizing the sector’s long-term growth prospects.

Innovative financing mechanisms, such as green bonds and infrastructure investment trusts (InvITs), have been explored to mobilize capital. Major Indian renewable energy developers have successfully raised significant funds through green bonds in international markets, demonstrating investor confidence. The government has also encouraged public financial institutions to prioritize lending to Renewable Energy projects. While challenges remain, particularly concerning the financial health of state electricity distribution companies (DISCOMs) and their ability to honor power purchase agreements, ongoing reforms like the Revamped Distribution Sector Scheme (RDSS) aim to address these systemic issues and further de-risk investments.

Emerging Technologies and Future Trajectories

India is not only focused on scaling existing renewable technologies but is also proactively exploring and investing in emerging clean energy frontiers. The National Green Hydrogen Mission, launched with an outlay of nearly ₹20,000 crore, is a monumental step towards establishing India as a global hub for green hydrogen production and export. This mission aims to significantly reduce reliance on fossil fuels, decarbonize hard-to-abate sectors like steel, cement, and refineries, and position India as a leader in this critical future energy vector. Sub-schemes under the mission focus on electrolyzer manufacturing, green hydrogen production, and pilot projects for various end-use applications.

Offshore wind energy, though still in its nascent stages, holds immense potential for India, particularly along the coasts of Gujarat and Tamil Nadu. The government has outlined a policy framework and identified potential zones for offshore wind development, with initial tenders expected in the near future. This diversification into new renewable technologies ensures a comprehensive long-term strategy for energy transition.

The progress in India’s renewable energy sector has been nothing short of transformative, fundamentally reshaping the nation’s energy landscape. Through a combination of ambitious targets, a conducive policy framework, and a vibrant ecosystem of domestic and international players, India has emerged as a global leader in Renewable Energy deployment. The sustained focus on large-scale solar and wind projects, coupled with strategic investments in manufacturing and grid modernization, underscores a commitment to achieving energy security and environmental sustainability simultaneously.

This multifaceted approach has seen India rapidly scale its renewable capacity, driving down costs and making clean energy increasingly competitive. The concerted efforts to boost domestic manufacturing, enhance grid integration capabilities, and promote decentralized solutions have created a resilient and diversified energy sector. The country’s proactive engagement with emerging technologies like green hydrogen further solidifies its long-term vision for a truly sustainable and self-reliant energy future, setting a remarkable example for other developing economies.