Comprehensive Analysis of Indian Renewable Energy Sector | Scrolls

by Karnivesh | 2026

India Renewable Energy Sector Industry Analysis Report.pdf

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India’s renewable energy journey has crossed a decisive threshold. What began a decade ago as a policy-driven transition away from fossil fuels has now evolved into a full-scale transformation of the country’s power system. By December 2025, India reached 258 GW of renewable capacity, accounting for over half (51.5%) of total installed power capacity a milestone that fulfils its 2030 climate commitment five years ahead of schedule. This achievement is not symbolic; it marks the point at which renewables shift from being supplementary to becoming the backbone of India’s energy future.

At the heart of this transformation lies scale and speed. Calendar year 2025 alone saw 44.5 GW of renewable additions, one of the fastest build-outs globally. Solar power dominates this growth, crossing 132 GW and emerging as the single largest source of new capacity, while wind power after years of stagnation has re-entered a growth phase, supported by hybrid project formats and improved policy clarity. Importantly, renewables are no longer just adding capacity at the margins; they are increasingly shaping system-level outcomes. In July 2025, non-fossil sources met over half of India’s peak electricity demand, demonstrating that clean energy is now capable of supporting real-time grid needs.

This expansion is underpinned by a powerful economic shift. Renewable energy in India is no longer expensive or experimental it is structurally cheaper than conventional power. Solar tariffs have fallen to ₹2.5/kWh, well below new coal-based power, while still delivering 12–15% equity returns. Falling equipment costs, scale efficiencies, and long-term PPAs have turned renewables into an infrastructure-like asset class, attracting both domestic and global capital. The investment opportunity ahead is enormous: achieving 500 GW of non-fossil capacity by 2030 will require ₹25 lakh crore of capital, create six lakh direct jobs, and position India as a global manufacturing and clean energy hub.

Three structural shifts define this new phase of growth.

First, manufacturing self-reliance has fundamentally altered the sector’s risk profile. Through the PLI schemes, India has built ~50 GW of domestic solar module capacity, sharply reducing import dependence and insulating developers from global supply shocks. High capacity utilisation and emerging exports signal that India is moving from being a price taker to a price influencer in global clean energy supply chains.

Second, the sector is transitioning from intermittent generation to reliability-focused power delivery. Wind–solar hybrids, firm dispatchable renewable energy (FDRE), and storage-linked projects are redefining how renewables are procured and valued. With hybrid tariffs around ₹3.0–3.5/kWh and FDRE at ~₹3.3/kWh, renewables are now competing directly with thermal power on both cost and reliability. Energy storage once a bottleneck is scaling rapidly through battery tenders and pumped hydro pipelines, enabling renewables to function as near-baseload power sources.

Third, green hydrogen is emerging as the next strategic frontier. With a target of 5 MMT production by 2030, India is positioning renewables not just as a power solution, but as a foundation for industrial decarbonisation. Steel, fertilisers, refining, and exports to Europe and Japan create a demand pull that could anchor over 125 GW of additional renewable capacity, extending the sector’s relevance far beyond electricity.

The competitive landscape reflects this maturity. Capacity is increasingly concentrated among large, well-capitalised players such as Adani Green, Tata Power Renewable Energy, NTPC Green, ReNew, and JSW Neo. Their scale allows aggressive bidding, access to low-cost capital, and consistent execution driving tariffs down while sustaining returns. Public sector participation, particularly through NTPC, adds balance-sheet strength and long-term stability to the ecosystem.

Yet, the road ahead is not without friction. The biggest risks are no longer about demand or policy, but execution. Grid infrastructure must expand rapidly, land acquisition needs streamlining, battery storage must scale from gigawatts to tens of gigawatts, and financing costs must converge closer to global benchmarks. These are non-trivial challenges but they are being actively addressed through transmission corridors, land banks, viability gap funding, and new financing instruments such as green bonds and InvITs.

The broader implication is clear: India’s renewable energy sector has moved beyond an installation-driven phase into a system-level, reliability-focused growth cycle. Policy certainty, technological maturity, and capital alignment are converging at scale. For investors, this represents a rare opportunity long-duration visibility, global cost leadership, and stable mid-teen returns in one of the world’s fastest-growing power markets.

In the years ahead, renewables will no longer be discussed as an alternative to India’s power system. They will be the power system clean, scalable, and increasingly firm. The transition story is over. What follows is execution at scale.