India’s Renewable Energy Goals: Progress and Challenges

India has set an ambitious objective of achieving 500 GW of non-fossil fuel-based power generation capacity by 2030. However, the country faces considerable challenges in aligning its renewable energy expansion with growing electricity demand. A key issue is the temporal mismatch between peak renewable energy production—especially from solar—and actual demand, resulting in both energy surpluses and shortages throughout the day. To overcome these challenges, India must diversify its renewable energy mix, particularly by strengthening wind capacity, improve installation efficiency, and adopt dynamic electricity pricing to incentivize consumption during periods of high renewable generation.

Major Developments in India’s Renewable Energy Landscape

1. Surge in Solar Power Deployment

India's solar energy sector is expanding rapidly, underpinned by robust policy support and favorable market conditions. As of October 2024, the country had installed 90.76 GW of solar capacity—26 times more than in 2014. Solar now accounts for approximately 44% of the renewable energy mix, and projections estimate a capacity of 170 GW by March 2025. This positions India as a global leader in solar energy adoption and innovation.

2. Advancing Green Hydrogen

Recognizing the long-term potential of clean fuels, India has launched the National Green Hydrogen Mission, backed by an initial funding of ₹600 crore. The initiative aims to position India as a global hub for green hydrogen production. Bharat Petroleum’s plan to invest $1 billion to build 2 GW of hydrogen capacity by 2025 reflects the growing momentum in this sector, in line with India’s goal of achieving net-zero emissions by 2070.

3. Influx of Renewable Energy Investments

India’s clean energy sector is witnessing a surge in international investment. Between 2000 and 2023, non-conventional energy attracted over $15.36 billion in FDI. In 2024 alone, investment is expected to grow by 83% to $16.5 billion. Major global firms, such as Brookfield Asset Management, are increasingly viewing India as a key renewable energy destination.

4. Boosting Energy Storage Infrastructure

To mitigate the variability of solar and wind energy, India is prioritizing energy storage. Projects like the 13,000 MW renewable power facility with 12,000 MWh battery storage in Ladakh aim to enhance grid stability. States like Tamil Nadu and Andhra Pradesh are also developing pumped storage solutions with a combined target of 4–6 GW by 2030, enabling better load management.

5. Expansion of Renewable Energy Parks

India has approved 59 solar parks with a combined capacity of 40 GW to streamline large-scale deployment. These parks offer dedicated infrastructure, reducing land acquisition delays and boosting project efficiency. A standout project is the 30 GW hybrid solar-wind plant in Gujarat, poised to become the world’s largest of its kind.

6. Decentralized Energy for Rural Access

India is promoting decentralized renewable energy (DRE) to bridge the rural-urban power divide. Through initiatives like the PM-KUSUM scheme, over 140 MW of solar plants and more than 273,000 solar pumps have been installed, benefiting farmers and remote communities. The Green Energy Open Access Rules 2022 further simplify access to clean power for small consumers.

7. Global Solar Leadership and Cooperation

India continues to play a pivotal role in global solar diplomacy through the International Solar Alliance (ISA), now comprising over 120 countries. By fostering global collaboration, India is helping member nations build capacity and adopt solar solutions while reinforcing its leadership in the clean energy transition.

8. Scaling Bioenergy and Waste-to-Energy

India is diversifying its renewable energy sources through bioenergy and waste-to-energy initiatives. With 11.32 GW of installed bioenergy capacity, programs like the PM JI-VAN scheme are driving second-generation ethanol projects, utilizing agricultural residues and reducing environmental waste.

9. Wind Energy Growth—Onshore and Offshore

Wind power continues to be an important pillar of India’s clean energy strategy. The country has achieved 47.2 GW of wind capacity, with expansion focused in Gujarat, Tamil Nadu, and Rajasthan. Offshore wind potential is also being explored, with estimates of around 70 GW—36 GW off Gujarat’s coast and 35 GW off Tamil Nadu.

Core Challenges Facing India's Renewable Energy Sector

1. Variability and Grid Integration

The intermittent nature of renewables like solar and wind complicates grid stability and energy planning. Robust storage solutions and smarter grid infrastructure are needed to manage fluctuations in generation and ensure consistent supply.

2. Land and Infrastructure Hurdles

Securing land for large renewable projects remains complex due to fragmented regulations, local opposition, and ecological concerns. Key states like Rajasthan and Gujarat are experiencing heightened land-use disputes.

3. Import Dependency for Solar Components

India continues to rely heavily on imports for solar modules and related equipment, with China supplying more than 60% of solar imports in 2023–24. This dependency poses both economic and strategic vulnerabilities.

4. Financing Gaps

Although large investments are being made, there is still a shortfall—particularly for small-scale or rural projects. Estimates suggest India must mobilize $68 billion annually by 2032 to meet its clean energy goals.

5. Policy and Regulatory Inconsistencies

Inconsistent state-level policies, fluctuating tariffs, and unclear incentives deter long-term investments. While exemptions like the ISTS charge waiver exist, their uneven implementation reduces effectiveness.

6. Environmental and Social Trade-offs

Large renewable installations can cause displacement and ecological damage. The Sillahalla Hydro Project in Tamil Nadu, for example, has sparked concerns over biodiversity loss and community rights.

7. Water-Intensive Energy Production

Some clean energy technologies, such as bioethanol and biomass, consume large quantities of water—posing risks in water-stressed regions. This calls for more water-efficient technologies and resource planning.

8. Slow Adoption of Rooftop Solar

Despite its promise, rooftop solar has seen sluggish uptake due to high upfront costs, limited consumer awareness, and fragmented policy implementation. The original 40 GW rooftop target set for 2022 has now been extended to 2026.

9. Inadequate Energy Storage

India's current battery storage capacity is insufficient to support its expanding renewable fleet. The Central Electricity Authority (CEA) estimates a need for over 82 GWh of storage by 2026–27 to balance peak load demands.

Strategies to Accelerate Renewable Energy Adoption in India

1. Modernizing Energy Infrastructure

Investments in advanced transmission networks, smart grids, and large-scale storage solutions—like lithium-ion batteries and pumped hydro—are critical. Strengthening inter-regional transmission links will ensure efficient distribution from generation-rich regions to demand centers.

2. Streamlining Land and Regulatory Processes

Implementing single-window clearance systems and creating dedicated renewable energy land banks can simplify project development. Digitizing environmental and regulatory approvals can further reduce administrative delays.

3. Expanding Financial Access and Incentives

Improved access to green financing, tax breaks, and extended viability gap funding will help smaller players enter the renewable market. Enhanced government support can also boost domestic manufacturing and reduce reliance on imports.

4. Promoting Distributed and Off-Grid Solutions

Encouraging rooftop solar, local microgrids, and other decentralized systems will make power more accessible, especially in rural regions, and reduce pressure on central infrastructure.

5. Transitioning the Transport Sector

Shifting to electric mobility and ensuring EV charging stations are powered by renewables can significantly cut fossil fuel use in transport. Incentives for EV purchases and infrastructure expansion will speed up adoption.

6. Strengthening Public-Private Collaboration

Encouraging private sector participation through clear policies, risk-sharing mechanisms, and guaranteed purchase agreements will unlock innovation and capital, especially for large-scale renewable projects.

7. Investing in Clean Energy R&D

India must invest in next-generation technologies like offshore wind, floating solar, and hydrogen fuel cells. Supporting R&D hubs and facilitating international collaboration will spur innovation and deployment.

8. Boosting Domestic Manufacturing

Expanding the Production-Linked Incentive (PLI) scheme to cover a broader range of renewable components will help build resilient local supply chains, support job creation, and improve competitiveness.