Executive summary

India has established itself as the world’s second fastest-growing renewable energy market and the second-largest manufacturer of solar PV modules. Renewable power capacity surpassed 300 GW in Q4 2026, which represents an almost fourfold increase over the past decade. In 2025, five years ahead of the national target, India achieved the milestone of sourcing 50% of its installed power capacity from non-fossil technologies. Furthermore, the country has become the fourth-largest liquid biofuel market globally, with production increasing sixfold since 2020. By 2030, renewable capacity is forecast to reach approximately 530 GW, with solar PV accounting for more than 80% of this expansion. Renewables are set to supply 35% of India’s electricity by the end of the decade, with generation nearly doubling from current levels to approach 950 TWh.

Introduction

The transformation of India’s energy sector has been driven by a combination of long-term policy vision, ambitious deployment targets, and a willingness to adapt frameworks as market conditions evolve. Since 2015, policy focus has increasingly shifted from creating market demand to addressing challenges in system integration, supply chain development, and infrastructure planning. India is expected to maintain its position as the second-largest market for renewable capacity growth worldwide through to 2030. These investments contribute to both economic resilience and electricity security while improving air quality and reducing dependence on imported fuels.

Renewable electricity

Solar PV and wind power have accounted for more than 90% of renewable capacity additions over the last decade and remain the main drivers of growth. Solar PV installed capacity tripled between 2020 and 2025 to approximately 140 GW, with annual additions reaching a record 38 GW in 2025. Competitive auctions have been the primary tool for deployment, awarding around 220 GW of utility-scale capacity since 2010. Utility-scale solar PV in India now has the world’s second-lowest levelised generation costs at USD 30-35/MWh. Tenders have evolved from stand-alone projects towards hybrid, storage-linked products designed to better align generation with demand. In 2025, India auctioned 15 GW of hybrid projects, maintaining its position as the global leader in hybrid renewable projects procurement.

The distributed solar segment is also accelerating, with capacity expected to triple to more than 100 GW by 2030. The PM Surya Ghar Muft Bijli Yojana, launched in 2024 with a total programme budget exceeding INR 750 billion (USD 8.1 billion), aims to install rooftop systems on 10 million households by March 2027. In the agricultural sector, the PM-KUSUM scheme supports the solarisation of feeders and irrigation pumps. To support these targets, India has expanded its annual solar PV module manufacturing capacity to around 225 GW as of September 2026. Future growth will depend on aligning infrastructure with deployment, including faster transmission expansion, improved forecasting, and increased energy storage. Key recommendations for continued progress include improving the financial health of distribution companies (DISCOMs), facilitating land acquisition, and streamlining permitting processes.

Renewable heat, transport and fuels

In the transport sector, liquid biofuel consumption reached 11 billion litres in 2025 and is projected to rise to 16 billion litres by 2030. Ethanol consumption increased almost sixfold between 2020 and 2025, making India the world’s fourth-largest consumer. New targets for sustainable aviation fuel have been introduced, starting at 1% for international flights in 2027 and reaching 5% by 2030. Electrification is advancing simultaneously, with electric vehicles accounting for more than 11% of new vehicle sales in 2026. India also leads global growth in electric three-wheelers.

The National Green Hydrogen Mission, launched in 2023, aims to build capacity to produce at least 5 Mt of renewable hydrogen by 2030. Although progress towards implementation has been slow, the project pipeline is now one of the largest globally. In the heating sector, renewable consumption is forecast to increase by 25% by 2030, driven by modern bioenergy and solar thermal heat. Solar thermal heat generation is expected to increase by more than 50%, lifting India from sixth to fourth place globally.

Energy security implications

Renewable energy deployment has already delivered substantial energy security benefits for India. Without the solar PV, wind, and bioenergy capacity added since 2010, coal imports in 2025 would have been around 110 million tonnes higher. Renewable electricity reduced cumulative spending on coal and natural gas imports by more than USD 100 billion between 2011 and 2025, with these savings forecast to more than double by 2030. In the transport sector, domestic biofuels reduced crude oil import dependence by approximately 4 percentage points in 2025. These buffers are particularly valuable during periods of supply disruptions and price volatility in global fossil fuel markets.