Advantage India
Robust
Demand
*Ministry of New and Renewable Energy targets 500 GW non-fossil-based electricity generation by 2030, as per the Prime Minister's COP26 announcement, with an added installation of 13.5 GW renewable energy capacity in 2023, corresponding to an investment of around Rs. 74,000 crores (US$ 8.90 billion).
*India’s Rs. 9,22,866 crore (US$ 109.50 billion) plan aims to expand power infrastructure, meet 458 GW demand by 2032, enhance transmission, integrate renewable energy, and boost energy security, unlocking vast untapped potential.
*India’s renewable energy sector witnessed a remarkable 420% YoY surge in capacity addition in June 2025, growing from 1.4 gigawatt (GW) in June 2024 to 7.3 GW this year.
Increasing
Investments
*Indian conglomerates plan to invest Rs. 67,42,400 crore (US$ 800 billion) in green hydrogen, clean energy, semiconductors, and EVs by 2034.
*According to Union Minister for New and Renewable Energy, Mr. Pralhad Joshi, India attracted Rs. 42,000 crore (US$ 4.88 billion) in clean energy Foreign Direct Investment (FDI) in 2023 alone, contributing to a cumulative FDI inflow of over Rs. 1,60,000 crore (US$ 18.60 billion) since 2020. In Q1 2025, clean energy investments soared 7.7 times YoY to Rs. 84,309 crore (US$ 9.8 billion).
Policy
Support
*On September 30, 2024, The Rajasthan government signed an MoU with NTPC Green Energy for 28,500 MW of renewable energy-based projects, as part of the total 31,825 MW of power generation projects worth Rs. 1.6 lakh crore (US$ 19.18 billion). This massive renewable energy investment is aimed at making Rajasthan self-reliant in the energy sector and significantly expanding the state's renewable power capacity.
*On August 05, 2025, Hindustan Power has signed a power purchase agreement with Uttar Pradesh Power Corporation Ltd. to set up a 435 MW DC solar power project. The project will supply clean electricity to the state for 25 years, aligning with Uttar Pradesh’s target of achieving 22,000 MW of clean energy capacity by 2026-27.
Competitive
Advantage
*India continues to rank fourth globally in wind power capacity, solar power capacity, and overall renewable energy installed capacity as of FY25, maintaining its position from FY24.
*Power generation from solar and wind projects are likely to be cost-competitive relative to thermal power generation in India in 2025-30.
*India has officially surpassed Japan to become the world's third-largest solar energy producer. According to data from the International Renewable Energy Agency (IRENA), India generated 1,08,494 GWh of solar power, exceeding Japan's 96,459 GWh.
Introduction
India’s energy demand is projected to rise more than any other country in the coming decades, driven by its large population and growth potential. To meet this surge sustainably, most of the additional demand must come from low-carbon, renewable sources. India’s commitment to net zero emissions by 2070 and 50% renewable electricity by 2030 marks a major global climate milestone.
India continues to rank fourth globally in wind power capacity, solar power capacity, and overall renewable energy installed capacity as of FY25, maintaining its position from FY24. India is the market with the fastest growth in renewable electricity, and by 2026, new capacity additions are expected to double. India has officially surpassed Japan to become the world's third-largest solar energy producer. According to data from the International Renewable Energy Agency (IRENA), India generated 1,08,494 GWh of solar power, exceeding Japan's 96,459 GWh.
With the increased support of the Government and improved economics, the sector has become attractive from an investor’s perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.
Market Size
Installed renewable power generation capacity has increased at a fast pace over the past few years, posting a CAGR of 14.93% between FY16 and FY26 (as of June 2025). India has 184.6 GW of renewable energy capacity in FY26 (as of June 2025). As of June 2025, 48.2% of the total power installed capacity is from non-fossil-based
Madhya Pradesh, one of India’s foremost states in renewable energy, had achieved an installed renewable capacity of 11,279.39 MW by June 30, 2025. This encompasses 5,570 MW of solar, 3,195.15 MW of wind, 155.46 MW of bioenergy, and 2,358.71 MW of hydroelectric power.
Solar energy contributed the most to the year’s capacity expansion, with 23.83 GW added in FY25, a significant increase over the 15.03 GW added in the previous year.
India's wind energy sector is making significant strides towards achieving the ambitious target of 100 GW of production by 2030, according to the Indian Wind Turbine Manufacturers Association (IWTMA).
The country currently has an installed wind energy capacity of over 50 GW and an annual domestic manufacturing capacity of over 18 GW for wind turbines and components.
India’s renewable energy sector witnessed a remarkable 420% YoY surge in capacity addition in June 2025, growing from 1.4 gigawatt (GW) in June 2024 to 7.3 GW this year.
India has hydroelectric power projects with a total capacity of 15 GW under construction, which will increase the country's total hydro capacity from 42 GW to 67 GW by 2031-32, supported by IMD's prediction of higher rainfall and the government's proactive stance towards accelerated hydropower development.
Investments/ Developments
Some major investments and developments in the Indian renewable energy sector are as follows:
- India is empowering startups and MSMEs to scale up clean energy solutions. With innovation support from the Ministry of New and Renewable Energy, smaller enterprises are being positioned as key drivers of energy transformation through decentralised and efficient technologies.
- According to Union Minister of Commerce and Industry, Mr. Piyush Goyal, India's renewable energy capacity has reached 227 GW, marking a 4,000% surge in solar capacity. He also noted that India is likely the first G20 nation to meet its Paris Agreement NDC targets.
- Over the last few years there has been an increase in the percentage contribution of renewable energy to total installed capacity. In 2013-14, the contribution was 12.92%, which increased to 45.50% as of March 2025.
- India is expected to add 32 GW of renewable capacity in 2025, up from 28 GW in 2024, according to Moody’s-owned Investment Information and Credit Rating Agency (ICRA).
- India's share of renewable energy in total foreign direct investment (FDI) inflows rose from about 1% in FY21 to around 8% in FY25. The renewable energy sector attracted US$ 3.4 billion in FDI in the first three quarters of FY25, nearly matching the total FDI for the entire FY24 at US$ 3.7 billion, reflecting growing global investor interest in India's clean energy transition.
- The National Green Hydrogen Mission is progressing with a Rs. 19,744 crore (US$ 2.26 billion) outlay. It includes the allocation of 3,000 MW electrolyser capacity and approvals for 8.6 lakh tonnes per annum of green hydrogen production, reinforcing India’s push towards industrial decarbonisation and energy security.
- India’s renewable energy sector posted record-breaking growth in the H1 2025, adding 22 gigawatts (GW) of capacity, up 56% YoY, according to data from the Central Electricity Authority. This surge has pushed the country’s total clean energy capacity, including large hydropower and nuclear, above that of fossil fuels for the first time.
- India is set to invest over US$ 360 billion in renewable energy and infrastructure by 2030, with US$ 190 billion to US$ 215 billion needed to achieve 500 GW of renewable capacity. An additional US$ 150 billion to US$ 170 billion will be required for electricity transmission and storage.
- India's renewable energy sector has attracted significant foreign direct investment (FDI), amounting to Rs. 1,59,959 crore (US$ 21.90 billion) from April 2000 to March 2025.
- According to Union Minister for New and Renewable Energy, Mr. Pralhad Joshi, India attracted Rs. 42,000 crore (US$ 4.88 billion) in clean energy FDI in 2023 alone, contributing to a cumulative FDI inflow of over Rs. 1,60,000 crore (US$ 18.60 billion) since 2020. In Q1 2025, clean energy investments soared 7.7 times YoY to Rs. 84,309 crore (US$ 9.8 billion).
- India's renewable energy sector is set to attract over US$ 250 billion in investments, with solar PV projects expecting US$ 15.5 billion and battery manufacturing US$ 2.7 billion by 2030.
- The Cabinet has approved a Rs. 1 lakh crore (US$ 11.41 billion) Research, Development and Innovation Fund. Union Minister Mr. Piyush Goyal highlighted its potential to rival Rs. 6-7 lakh crore (US$ 68.47-79.88 billion) R&D investments in advanced economies, leveraging India’s cost advantages.
- The Union Budget for 2025-26 has notably enhanced allocations for the renewable energy sector, with budget estimates for MNRE totalling Rs. 256.49 crore (US$ 3.03 billion), a 39% increase over last year’s Rs. 19,100 crore (US$ 2.26 billion).
- 59 solar parks with an aggregate capacity of 40 GW have been approved in India. Solar Parks in Pavagada (2 GW), Kurnool (1 GW), and Bhadla-II (648 MW) are among the top 5 operational solar parks of 7 GW capacity.
- The world’s largest renewable energy park of 30 GW solar-wind hybrid capacity is under installation in Gujarat.
- India offers significant opportunities for investments in the RE sector, with US$ 196.98 billion worth of projects underway.
- Wind energy has an offshore target of 30 GW by 2030, with 3 potential sites identified.
- India aims to become a global wind power hub, with policy support driving local manufacturing and a target of capturing 10% of global wind energy demand by 2030.
- BPCL plans US$ 1.19 billion (Rs. 10,029 crore) for green energy, targeting 2 GW by 2025, 10 GW by 2035, and 7,000 EV chargers in five years.
- State-owned power giant NTPC announced on February 24, 2025 that it has signed preliminary agreements to invest over Rs. 2 lakh crore (US$ 23.6 billion) in a range of renewable energy projects in Madhya Pradesh, including solar, wind, pumped hydro storage, non-fossil fuel-based initiatives, and other carbon-neutral ventures.
- NTPC has announced its plan to invest about Rs. 80,000 crore (US$ 9.13 billion) in renewable energy projects in Telangana, focusing on solar and wind projects.
- NLC India Ltd secured a Letter of Award from NTPC for a 450 MW wind-solar hybrid project, enhancing its hybrid capacity to 600 MW and supporting its 10 GW renewable energy target by 2030.
- Avaada Group signed agreements with the Maharashtra government for 3,600 MW pumped storage projects and with the Bihar government for Rs. 5,000 crore (US$ 570.58 million) in renewable investments.
- Indian renewable energy firm SAEL Industries Ltd will invest Rs. 8,200 crore (US$ 935.75 million) to build a 5-gigawatt (GW)-per-year integrated solar cell and module manufacturing facility in the northern state of Uttar Pradesh.
- In February 2025, Emmvee Group, a Bengaluru-based manufacturer of solar photovoltaic panels, announced that it will invest Rs. 15,000 crore (US$ 1.7 billion) to establish a manufacturing facility and generate 10,000 jobs.
- Ayana Renewable Power Pvt Ltd plans to set up 2 GW of renewable projects with Rs. 12,000 crore (US$ 1.53 billion) in Karnataka.
- Radiance Renewables and the UK’s Private Infrastructure Development Group formed Radiance InfraCo Renewables to develop greenfield hybrid projects in India.
- India and the Netherlands will establish a green and digital corridor between Indian ports and the Port of Rotterdam.
- On December 4, 2023, Andhra Pradesh announced Rs. 6,600 crore (US$ 794 million) clean energy and infrastructure plans, including 750 MW and 100 MW solar projects, substations, and EV initiatives.
- On January 4, 2024, Torrent Power signed pacts with Gujarat to invest Rs. 47,350 crore (US$ 5.70 billion) in renewable energy, green hydrogen, and power distribution.
- On January 8, 2024, Tata Power announced a Rs. 70,000 crore (US$ 8.42 billion) plan to build 10 GW of solar and wind capacity in Tamil Nadu over 5-7 years.
- Maruti Suzuki India will invest Rs. 450 crore (US$ 54 million) in renewable energy projects, including a biogas plant and expansion of solar capacity.
- Eco Wave Power and Bharat Petroleum signed an MoU at India Energy Week 2025 to explore 40,000 MW of wave energy potential.
- The Solar Energy Corporation of India (SECI) has conducted large-scale auctions and awarded contracts for 47 solar parks with over 25 GW of capacity.
- Indian companies are outpacing global averages in emissions reporting and reduction, with decarbonisation yielding strong financial returns and driving sustainability and AI-led innovation.
- Around US$ 2.8 trillion will be invested in energy globally in 2023, with over US$ 1.7 trillion going to clean energy—covering renewables, nuclear, grids, storage, low-emission fuels, and end-use electrification.
Government initiatives
Some initiatives by the Government of India to boost India’s renewable energy sector are as follows:
- India’s Production Linked Incentive Scheme for High Efficiency Solar PV Modules (PLI) has led to 18.5 GW of module capacity, 9.7 GW of solar cell capacity and 2.2 GW of ingot-wafer capacity being established as of June 30, 2025. The program has awarded a total of 48 GW of module manufacturing capacity.
- The government allocated Rs. 19,500 crore (US$ 2.57 billion) for a PLI scheme to boost manufacturing of high-efficiency solar modules.
- The Indian government's commitment to reaching net-zero emissions by 2070 and increasing its renewable energy target to 500 GW by 2030 at the COP26 summit has provided great support to the industry and spurred unprecedented growth.
- Under the PM Surya Ghar Muft Bijli Yojana, the Government of India aims to install rooftop solar plants in one crore households by 2026-27. As of July 2025, around 16.51 lakh households have already benefited from these installations, marking steady progress toward the target of expanding clean and affordable energy access.
- Under the Ministry’s skill development programmes, Suryamitra, Vayumitra, and Jal-urja Mitra, over 31,829 local youth and technical workers have already been trained and placed.
- Under the scheme for the Development of Solar Parks and Ultra-Mega Solar Power Projects, eight solar parks with a cumulative capacity of 4,248 MW have been sanctioned in Madhya Pradesh, further advancing India's clean energy goals.
- Proposed solar cities and parks: The Solar Park Scheme, launched in December 2014, initially targeted 20,000 MW and was expanded to 40,000 MW by March 2017. By February 2025, 55 solar parks were approved across 13 states with a total sanctioned capacity of about 39,958 MW. Approximately 12,396 MW capacity has been installed in 24 parks, and 13,896 MW projects are operational in 26 parks. Among these, 18 parks (10,856 MW) are fully developed, and 8 parks (10,043 MW) are partially developed, with about 10,756 MW commissioned and another 3,140 MW running in partially developed parks.
- The government is supporting floating solar, canal-top solar, agrivoltaics, and renewable projects in tribal and remote regions. These efforts optimise land use and bring clean energy to under-served areas, driving inclusive and sustainable energy development.
- To strengthen grid reliability, the government launched a Rs. 5,400 crore (US$ 616.23 million) Viability Gap Funding scheme for 30 GWh of Battery Energy Storage Systems (BESS). This initiative is expected to attract investments worth Rs. 33,000 crore (US$ 3.77 billion) and support India’s renewable energy integration.
- The Ministry of New and Renewable Energy (MNRE) has proposed the establishment of a 13,000 MW renewable energy (RE) capacity along with a 12,000 MWh Battery Energy Storage System (BESS) in Ladakh. On October 18, 2023, the Cabinet Committee on Economic Affairs approved the construction of an Inter-State Transmission System (ISTS) to facilitate the power evacuation and grid integration of these RE projects in Ladakh.
- Government plans to invest Rs. 9,12,000 crore (US$ 107.89 billion) in power transmission infrastructure by 2032 to boost capacity and support growing electricity demand.
- As of January 2, 2024, the Government of India is implementing the Production Linked Incentive (PLI) Scheme for the National Programme on High Efficiency Solar PV Modules, aimed at achieving gigawatt-scale manufacturing capacity. Under Tranche-II, with a budget allocation of Rs. 19,500 crore (US$ 2.35 billion), Letters of Award were issued in April 2023 for the establishment of 39,600 MW of fully or partially integrated solar PV module manufacturing units.
- On December 12, 2023, the Union Minister for New & Renewable Energy and Power reported the installation of 140 MW solar power plants and 2.73 lakh standalone solar pumps under PM-KUSUM, aimed at farmer welfare and environmental sustainability.
- The Pradhan Mantri Jaiv Indhan - Vatavaran Anukool Fasal Awashesh Nivaran (PM JI-VAN) Yojana, amended in 2024, aims to provide financial support for advanced bioethanol projects using renewable feedstocks. Over Rs. 908 crore (US$ 106.7 million) has been approved for 2G bioethanol projects, including commercial-scale initiatives in Panipat, Haryana.
- On September 30, 2024, The Rajasthan government signed an MoU with NTPC Green Energy for 28,500 MW of renewable energy-based projects, as part of the total 31,825 MW of power generation projects worth Rs. 1.6 lakh crore (US$ 19.18 billion). This massive renewable energy investment is aimed at making Rajasthan self-reliant in the energy sector and significantly expanding the state's renewable power capacity.
- In Budget 2023-24, Green Growth was identified as one of the nodes in the SAPTARISHI (7 priorities).
- In Budget 2023-24, pumped storage projects received a push with a detailed framework to be formulated.
- Union Budget 2023-24 envisions to create sustainable cities of tomorrow. To translate this, states and cities will be encouraged to undertake urban planning reforms and actions to transform our cities into 'sustainable cities of tomorrow.’
- On November 9, Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman, approved the final Sovereign Green Bonds framework of India. The Paris Agreement's Nationally Determined Contribution (NDC) targets will be further strengthened by this approval, which will also aid in attracting foreign and domestic capital to green projects.
Road Ahead
India has set ambitious climate and energy goals, including reducing the carbon intensity of its economy by 45% by 2030, achieving 50% of cumulative installed power capacity from renewables by 2030, and reaching net-zero emissions by 2070. Low-carbon technologies alone could create a market worth up to US$ 80 billion in the country by 2030.
Green hydrogen is expected to play a pivotal role in this transition. India targets production of five million tonnes of green hydrogen annually by 2030, supported by an electrolyser manufacturing capacity projected to reach 8 GW per year by 2025. To meet this goal, at least 50 GW of electrolysers will be required, and the cumulative value of the green hydrogen market could reach US$ 8 billion by 2030.
The transformation of India’s power sector is being accelerated by rising population, rural electrification, and growing energy needs. Clean energy adoption is enabling villages to become self-sustainable, reducing pollution and dependence on fossil fuels. With advances in battery storage, solar costs could reduce by as much as 66% from current levels. Replacing coal with renewables could also save the country Rs. 54,000 crore (US$ 8.43 billion) annually.
Wind-solar hybrid projects will further strengthen the energy mix, with around 15,000 MW of hybrid capacity expected to be added between 2020 and 2025. According to the Central Electricity Authority (CEA), renewable energy’s share in power generation is projected to rise from 18% in 2022 to 44% by 2030, while thermal power is expected to fall from 78% to 52%. By then, India’s total power demand is estimated to reach 817 GW, underlining the scale of opportunity for the renewable energy sector.
References: Central Electricity Authority, Ministry of New and Renewable Energy, Media Reports, Press Releases
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