Credit rating agency ICRA Limited forecasts that India’s renewable energy installed capacity will reach 250GW by March 2026, driven by a reserve of over 80GW of large-scale projects and favorable prices for solar cells and modules.
According to data from the Central Electricity Authority (CEA), India’s cumulative renewable energy installed capacity had increased to 203.18GW by October 2024, up 15% year-on-year. Among this, solar PV installations accounted for 92.12GW.
ICRA expects India’s annual renewable energy additions to grow from 19GW in FY24 to over 26GW in FY25 and further to 32GW in FY26. This growth is led by solar power generation and stimulated by the impending expiry of the Inter-State Transmission System (ISTS) surcharge exemption in June 2025.
Girish Kumar Kadam, Senior Vice President and Joint Head – Corporate Ratings at ICRA, said that besides utility projects, rooftop PV and commercial and industrial (C&I) sectors will also contribute to growth. However, delays in land acquisition and transmission connectivity remain major challenges, potentially impacting the industry’s growth prospects.
Over the next five years, ICRA predicts that India’s renewable energy and large hydropower will increase their share of total national electricity generation from 21% in FY24 to over 35% in 2030. Achieving this will require 50GW of energy storage capacity, met by both battery energy storage systems (BESS) and pumped storage projects (PSP).
Furthermore, with the growth of renewable energy “round-the-clock” (RTC) and “firm dispatchable renewable energy” (FDRE) projects, flexibility will be enhanced to address intermittency risks. India’s central nodal agency and railway departments have completed bidding for 14GW of RTC/FDRE projects, with electricity prices ranging competitively between INR 4.0-5.0 (approx. USD 0.047-0.059) per unit, more advantageous than recent coal power bid prices exceeding INR 6.0 (approx. USD 0.071) per unit.
