India’s renewable energy capacity, including large hydro projects, is forecasted to climb to 250 GW by March 2026, up from 201 GW as of September 2023, according to a recent report.
A steady increase in tendering activity has been observed this fiscal year, aligning with the government’s 50 GW annual bidding trajectory announced in March 2023. This robust project pipeline, coupled with favorable solar photovoltaic (PV) cell and module prices, is projected to drive renewable energy (RE) additions from 19 GW in FY2024 to over 26 GW in FY2025, according to Girishkumar Kadam, Senior Vice President and Co-Group Head of Corporate Ratings at ICRA. Kadam noted, “This will further scale up to 32 GW in FY2026, mainly driven by the solar power segment.”
The upcoming expiration of the waiver on inter-state transmission system (ISTS) charges in June 2025 is another factor expected to spur capacity expansion. Beyond utility-scale projects, significant contributions are also anticipated from rooftop solar installations and the commercial and industrial (C&I) segments.
Over the next five years, India’s expanding RE capacity is predicted to increase the share of renewable energy and large hydro in the country’s total electricity generation from 21% in FY2024 to over 35% by FY2030. This growth is underpinned by a project pipeline exceeding 80 GW, highlighting an improvement in tendering activity during FY2024, ICRA reported.
As the RE sector grows, energy storage projects will play a critical role in managing the intermittency of renewable generation, Kadam emphasized. Additionally, the focus is shifting towards awarding round-the-clock (RTC) and firm and dispatchable renewable energy (FDRE) projects, which promise a steady power supply. Hybrid renewable energy systems integrated with energy storage solutions are seen as key to addressing these challenges.
This comprehensive development approach signals India’s commitment to achieving a sustainable energy future while addressing the intermittency risks associated with renewable sources.
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