Key findings

The SET 2026 evaluation reveals that progress in individual areas does not automatically result in a system-wide electricity transition. However, advancements have been made across the 21 Indian states assessed, though the pace varies. Karnataka, Himachal Pradesh, and Kerala demonstrate consistent leadership in decarbonisation. Tamil Nadu, Maharashtra, and Rajasthan have progressed through energy efficiency interventions. Delhi and Haryana remain strong performers regarding power ecosystem readiness, supported by robust distributed solar adoption and reliable supply. In the market enablers dimension, Andhra Pradesh, Uttar Pradesh, and Rajasthan lead due to up-to-date policies and green tariff adoption.

Executive summary

India’s electricity demand is rising rapidly due to sustained economic growth, urbanisation, and transport electrification. The power sector accounts for nearly half of India’s total carbon dioxide emissions, making the transition to clean electricity critical to achieving National Determined Contribution (NDCs) objectives. While national policies set the direction, state governments shape outcomes through power procurement choices, distribution company (DISCOM) performance, and grid preparedness. The report evaluates states across three dimensions: decarbonisation, readiness and performance of the power ecosystem, and market enablers.

Introduction

Electricity is the primary energy source for sectors representing over 40% of global economic activity. India aims to achieve 500 gigawatts (GW) of non-fossil fuel installed capacity by 2030. In FY2025, India added 29GW of renewable capacity, led by 24GW of solar, pushing cumulative solar installations past 100GW. By October 2025, total installed renewable capacity reached 251GW, enabling India to meet its 2030 target of 50% non-fossil capacity five years ahead of schedule. However, electricity consumption increased by 33% from FY2021 to 1,694 billion units (BUs) in FY2025, a compounded annual growth rate (CAGR) of 7.4%. Current projections indicate an 80% increase in demand by 2035.

Methodology

The SET 2026 scores are derived from a three-dimensional framework using 18 parameters. These parameters assess quantitative and qualitative data to track progress across 21 states that collectively contribute to approximately 95% of India’s annual power demand. Performance is classified into three categories: high performers, states on the rise, and states with potential to accelerate. Refinements in this edition include new parameters for smart metering, green hydrogen uptake, and the availability of time-of-day (ToD) tariff mechanisms.

Dimension 1: decarbonisation

This dimension examines shifts to renewable electricity and the decoupling of economic growth from emissions. Karnataka leads this dimension with a renewable energy share of approximately 37% in its power procurement mix. Himachal Pradesh, a hydropower-dominated state, recorded the highest renewable share at approximately 65% and the lowest emissions intensity. Kerala excelled due to high renewable potential utilisation (31%) and strong energy efficiency performance. Rajasthan achieved the highest annual renewable capacity growth rate of 26% over the past five financial years, although it has utilised only 8% of its significantly higher renewable potential.

Dimension 2: readiness and performance of the power ecosystem

Power system readiness is essential for seamless renewable integration. Delhi remained a top performer, with distributed solar capacity of 303MW accounting for nearly 97% of its total solar capacity. Haryana also performed well, with distributed solar representing 87% of its total solar installed capacity. Assam excelled in DISCOM performance, with the Assam Power Distribution Company Limited (APDCL) receiving an A rating. Conversely, states like West Bengal and Telangana showed limited progress, with West Bengal’s distributed solar capacity remaining low at 4% of total renewable capacity and Telangana facing deteriorating power adequacy.

Dimension 3: market enablers

Market enablers facilitate both supply and demand-side transitions. Andhra Pradesh emerged as a high performer, driven by an integrated clean energy policy and 1,440MW of pumped hydro storage capacity either operational or under construction. Uttar Pradesh maintained momentum in electric vehicle (EV) deployment with a 10% adoption rate in FY2025 and a target of 1 million metric tonnes of green hydrogen by 2028. Rajasthan offers the lowest green tariff premium in the country at INR 0.05/kWh. Assam stood out for its high EV adoption rate of 11% in FY2025.

Conclusion

No state demonstrated consistently strong performance across all three dimensions in this edition. Even decarbonisation leaders show gaps in system readiness or market-enabling conditions. As renewable penetration increases, success depends not only on capacity addition but also on grid readiness, market participation, and demand-side efficiency. A cluster of states, including Gujarat, Maharashtra, and Punjab, are moving in the right direction but must address structural gaps to achieve a holistic transition.

Recommendations

To accelerate the subnational transition, states should create strong and predictable demand for clean electricity by aligning procurement with revised Renewable Consumption Obligation (RCO) targets. It is recommended that states strengthen DISCOM financial health through cost-reflective tariff revisions and performance-linked financial support. Implementation of direct benefit transfer (DBT) for electricity subsidies can help rationalise tariffs and reduce financial risk. Additionally, states should introduce market designs like market-based economic dispatch (MBED) and accelerate grid build-out. To integrate planned renewable capacities, India requires an estimated energy storage capacity of 73.9GW by 2031-32. Finally, unlocking decentralised renewable energy through agricultural feeder solarisation and simplified metering will significantly complement utility-scale additions.