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.
As of May 2026, India’s installed renewable energy capacity, including large hydro projects, stood at 282.75 GW, underscoring the country’s continued progress in expanding its clean energy portfolio. India ranked 3rd globally in renewable energy installed capacity, reaching 250.52 GW as of December 2025, according to IRENA Renewable Energy Statistics 2026. China leads with 2,258.02 GW, followed by the United States at 467.92 GW, while India remains ahead of countries such as Brazil (228.20 GW) and Germany (199.92 GW). 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 16.84% between FY16 and FY26. India has 223.2 GW of renewable energy capacity in FY26.
As of May 31, 2026, the country's total installed power generation capacity stood at 542 GW, of which approximately 291 GW (53.8%) was contributed by non-fossil sources, including solar, wind, hydro, small hydro, nuclear, and bio power, reflecting the country's continued progress towards a cleaner energy mix. 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.
On April 22, 2026, Union Minister for New and Renewable Energy, Shri Pralhad Joshi, announced that India recorded its highest-ever annual wind capacity addition of 6.1 GW in FY26, taking the country’s cumulative installed wind power capacity to over 56.1 GW. India currently ranks as the world's fourth-largest wind energy market, with an additional 28 GW of projects under implementation. Backed by an estimated wind energy potential of 1,164 GW, the Government aims to achieve 100 GW of installed wind capacity by 2030, supported by continued policy reforms and a domestic manufacturing capacity exceeding 24 GW annually.
Installed capacity from large hydro projects in India increased from 35.9 GW in March 2008 to 51.96 GW as of May 2026, while capacity from small hydro plants increased four-fold to 5.17 GW in the same period.
Investments/ Developments
Some major investments and developments in the Indian renewable energy sector are as follows:
- On June 4, 2026, the Ministry of New and Renewable Energy (MNRE) announced that the PM Surya Ghar: Muft Bijli Yojana had crossed 40 lakh beneficiary households within two years of its launch. More than 33 lakh rooftop solar systems, with a cumulative capacity exceeding 12 GW, had been installed by May 2026, while over one crore households had registered under the scheme. The Government has set a target of reaching 75 lakh rooftop solar installations by December 2026, reinforcing India's transition towards distributed renewable energy and energy self-reliance.
- The Government of India is accelerating rooftop solar adoption under the PM Surya Ghar Muft Bijli Yojana, targeting installations in one crore households by 2026-27, with 26.19 lakh systems installed as of March 19, 2026. The scheme has disbursed Rs. 17,967.53 crore (US$ 2.03 billion) as Central Financial Assistance, supported by a fully digital, time-efficient subsidy mechanism with an average processing time of around 15 days.
- In FY26, solar power generation reached 174.75 billion units (BU), up from 144.15 BU in FY25, registering a strong year-on-year growth of 21.23%. During the first two months of FY27 (April–May 2026), solar power generation increased to 42,483.60 million units (MU) from 30,117.14 MU in the corresponding period last year, reflecting robust year-on-year growth of 41.06%. In May 2026 alone, solar power generation stood at 21,584.00 MU, highlighting the continued expansion of India’s solar energy capacity and generation.
- India’s power sector has witnessed significant expansion, with total installed capacity reaching 542 GW as of May 2026. The National Electricity Plan (2023-32) outlines an investment of Rs. 9.15 lakh crore (US$ 103.55 billion) to meet a projected peak demand of 458 GW by 2032.
- The Government of India has approved the Small Hydro Power (SHP) Development Scheme for 2026-31 with an outlay of Rs. 2,584.60 crore (US$ 0.29 billion) to support installation of ~1,500 MW capacity across states. The scheme is expected to catalyse investments of around Rs. 15,000.00 crore (US$ 1.70 billion), particularly in hilly and North Eastern states, while promoting decentralised renewable energy generation.
- India recorded FDI equity inflows of Rs. 5,16,936 crore (US$ 58.85 billion) in FY26, registering an 23% year-on-year increase, compared to Rs. 4,21,929 crore (US$ 50.02 billion) in FY25. The non-conventional energy sector attracted FDI inflows of Rs. 26,412 crore (US$ 3.02 billion), accounting for approximately 5.1% of the total FDI received during FY26 and remaining among the key sectors attracting foreign investment.
- India’s renewable energy sector is undergoing a significant transformation, driven by its ambitious target of achieving 500 GW of non-fossil fuel capacity by 2030. As of December 2025, around 23.90 lakh households had installed rooftop solar systems with a capacity of ~7 GW, supported by subsidy disbursements of Rs. 13,464.60 crore (US$ 1.52 billion) under the PM Surya Ghar scheme
- India’s rooftop solar programme under PM Surya Ghar has witnessed accelerated progress, with over 9.56 GW of rooftop solar capacity installed as of March 2026. This marks a significant increase from earlier figures, with the scheme rapidly expanding beyond 23.96 lakh households covered as of December 2025, indicating strong momentum towards the target of one crore solar-powered homes.
- According to Department of Promotion of Industry and Internal Trade (DPIIT) from April 2000-June 2025 non-conventional energy sector attracted Rs. 2,04,341 crore (US$ 23.04 billion) cumulative FDI inflows in India.
- India and the Netherlands are set to strengthen their clean energy collaboration by establishing a green and digital corridor between Indian ports and the Port of Rotterdam.
- On November 19, 2025, KPI Green Energy Ltd and Inox Solar Ltd signed an MoU to jointly develop 2.5 GW of solar and hybrid renewable-energy projects across India.
- On October 22, 2025, Coal India Limited signed a Memorandum of Understanding with Indian Institute of Technology Madras to establish a “Centre for Sustainable Energy” focused on developing low-carbon technologies, repurposing coal mines and building human capital for India’s clean-energy transition.
- On September 23, 2025, a report by National Institute of Solar Energy (NISE) estimated that India has a feasible ground-mounted solar photovoltaic potential of 3,343.37 GWp across 27,571 sq km of wasteland, sharply up from the 748.98 GWp estimated in 2014.
- NHPC Ltd will commission 2,170 MW of new hydropower capacity by the end of FY26, including the 2,000 MW Subansiri Hydropower Project in Arunachal Pradesh, which will become the largest hydroelectric project in India once fully operational.
- Avaada Group announced on April 29, 2025, that it has signed an initial agreement with the Maharashtra government to develop two pumped storage projects in the state, with a combined capacity of 3,600 megawatts (MW). The projects, which include the 2,400 MW Pawana Falyan and the 1,200 MW Sirsala, will require a cumulative investment of Rs. 15,100 crore (US$ 1.77 billion). As stated by the company, these initiatives are expected to create over 3,800 direct employment opportunities.
- 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.
Government initiatives
Some initiatives by the Government of India to boost India’s renewable energy sector are as follows:
- The Union Cabinet has approved the Small Hydro Power (SHP) Development Scheme for 2026-31 with an outlay of Rs. 2,584.60 crore (US$ 0.29 billion), aimed at installing ~1,500 MW of capacity across states. The scheme focuses on decentralised renewable energy, particularly in hilly and North Eastern regions, and is expected to catalyse investments of around Rs. 15,000.00 crore (US$ 1.70 billion).
- The Union Budget 2026-27 significantly strengthens India’s renewable energy push, with the Ministry of New and Renewable Energy (MNRE) allocation reaching Rs. 44,614.67 crore (US$ 5.05 billion), reflecting a 40.52% increase over 2025-26 Budget Estimates of Rs. 31,749.38 crore (US$ 3.75 billion).
- The allocation for the National Green Hydrogen Mission has been retained at Rs. 600 crore (US$ 67.90 million) in the Union Budget 2026-27, indicating continued government support towards developing a domestic green hydrogen ecosystem. The sustained funding is expected to facilitate pilot projects, strengthen electrolyser manufacturing capacity, and promote research and innovation across the value chain.
- 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.
- 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.
- 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.
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
FAQs
The renewable energy sector in India is among the world's fastest-growing clean energy markets, ranking third globally in installed renewable energy capacity. Strong policy support and rising investments continue to accelerate the country's clean energy transition.
The renewable energy sector in India had an installed capacity of 282.75 GW, including large hydro projects, as of May 2026. Non-fossil sources now contribute over half of India's total installed power generation capacity.
India's renewable energy sector is powered by solar, wind, hydropower, bioenergy, and small hydro projects. Solar and wind continue to lead capacity additions, while hydropower and bioenergy strengthen the country's diversified clean energy mix.
The Government is supporting the renewable energy sector in India through PM Surya Ghar, the National Green Hydrogen Mission, the Solar PV PLI Scheme, Solar Parks, Battery Energy Storage Systems (BESS), and Small Hydro Power initiatives.
India's renewable energy sector is accelerating green hydrogen through the National Green Hydrogen Mission while expanding rooftop solar, utility-scale solar parks, and domestic solar manufacturing. These initiatives support energy security, decarbonisation, and clean industrial growth.
The renewable energy sector in India offers investment opportunities across solar, wind, battery storage, green hydrogen, transmission infrastructure, offshore wind, and renewable manufacturing. Strong FDI inflows and supportive government policies continue to attract global investors.
India aims to achieve 500 GW of non-fossil fuel capacity by 2030, meet 50% of its electricity needs from renewable sources, and produce 5 million tonnes of green hydrogen annually, reinforcing its long-term clean energy and net-zero ambitions.
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