India’s Renewable Energy Sector Hits Record Pace: 20.1 GW Added in Five Months, Solar Leads the Charge
- RE Society of India RESI
- Oct 1
- 2 min read
New Delhi, October 1, 2025 – India’s renewable energy sector is witnessing unprecedented momentum. According to reports, the country added 20.1 GW of new renewable capacity in the first five months of FY2026 (April–August), a 123% year‑on‑year surge. Solar power dominated with 17.5 GW, while wind contributed 2.6 GW, positioning India to cross 35 GW of new capacity this fiscal year.
Key Growth Drivers
Robust Pipeline: The Central Electricity Authority (CEA) reports a 142.8 GW project pipeline, ensuring visibility for the next 4–5 years.
Policy Incentives: The GST cut from 12% to 5% on solar modules and wind turbines is expected to reduce project costs by ~5% and tariffs by 10–17 paise/kWh.
Corporate & Industrial (C&I) Demand: The C&I segment will require ~100 GW of renewable capacity in the next five years, growing at ~30% CAGR.
Manufacturing Push: India added 44.2 GW of solar module and 7.5 GW of solar cell manufacturing capacity in H1 FY2026, led by Gujarat, Rajasthan, and Uttar Pradesh.
Sectoral Challenges
Auction Slowdown: Only 3.4 GW was auctioned in H1 FY2026 due to delays in signing PSAs and PPAs2.
Transmission Bottlenecks: Grid augmentation is lagging behind capacity additions, raising curtailment risks.
Module Price Gap: Imported n‑type modules remain competitive at 8–9 cents/W, but domestic modules cost 15–17 cents/W due to ALMM rules.
Trade Headwinds: The 50% U.S. tariff on Indian solar exports threatens OEM competitiveness.
Storage & Future Outlook
Energy Storage: India will need 50 GW of storage by 2030, combining BESS and pumped hydro.
Hybrid Projects: Falling storage tariffs are making solar‑wind‑storage hybrids increasingly viable.
Market Confidence: Credit ratings remain stable, with more upgrades than downgrades in FY2026, reflecting strong commissioning and ownership transitions.
The Renewable Energy Society of India (RESI) views this as a watershed moment in India’s clean energy transition. To sustain momentum, the sector must:
Accelerate PSA/PPA execution to unlock auctioned capacity.
Invest in grid modernization to integrate large‑scale renewables.
Balance domestic manufacturing protection with cost competitiveness.
Scale up energy storage deployment to ensure round‑the‑clock renewable power.
India’s renewable energy sector is not just adding capacity—it is building the foundations of a globally competitive clean energy ecosystem. With record solar growth, a booming manufacturing base, and rising C&I demand, India is on track to cement its leadership in the global energy transition.
Comments