Picture the Indian grid five years from now: over a third of every light bulb, every air conditioner, every factory motor powered by clean, renewable energy. This isn’t aspirational rhetoric—it’s happening now. India added a record 22 gigawatts of renewable energy capacity in the first half of 2025, a 57% jump from the previous year, whilst overall additions reached 34.40 gigawatts during the first nine months of 2025, marking a 71% rise year-over-year.
According to ICRA, India’s renewable energy share in electricity generation—including large hydropower—is projected to soar beyond 35% by financial year 2030, up from just over 22% in 2025. This isn’t merely progress; it’s transformation at unprecedented velocity. Yet beneath these spectacular numbers lies a complex reality of transmission bottlenecks, policy challenges, and the urgent need for battery storage solutions. The race isn’t just about building capacity anymore—it’s about making that capacity work reliably, affordably, and equitably across the world’s most populous nation.
Record-Breaking Capacity Additions Accelerate India’s Clean Energy Push
India’s renewable energy sector is experiencing explosive growth that’s outpacing even optimistic forecasts from just two years ago. By October 2025, renewable energy sources made up 39.66% of India’s total installed power capacity, with total installed power capacity crossing 505 gigawatts. Solar energy leads this transformation dramatically—the country’s installed solar capacity reached 129.923 gigawatts by October 2025, representing a 38.23% increase compared to the previous year.
The momentum isn’t limited to solar alone. Wind energy capacity additions surged 88.80% year-over-year during the first nine months of 2025, according to Jyoti Gulia, Founder and CEO of JMK Research. India added 18.4 gigawatts of solar, 3.5 gigawatts of wind, and 250 megawatts of bioenergy in the first half of 2025. Rooftop solar installations grew particularly strongly, expanding 81% year-over-year with 5.80 gigawatts added, supported by over 579,000 loan applications worth approximately £1.31 billion sanctioned by public sector banks.
Between fiscal years 2025 and 2030, an estimated 200 gigawatts of renewable capacity will be added, with robust government backing and market enthusiasm. After awarding a record 47.3 gigawatts in FY 24 and 40.6 gigawatts in FY 25, the pace of new project bids has moderated this fiscal year but remains substantial for pipeline strength. Stable and competitive tariffs continue benefiting renewable projects, driven by technology cost reductions and economies of scale that encourage large commercial and industrial consumers to adopt greener energy sources, reinforcing demand growth. Government initiatives such as accelerated bidding, extended viability gap funding, transmission charge waivers, and sustainability commitments secure investor confidence and sectoral momentum.
Regionally, three states—Gujarat, Rajasthan, and Maharashtra—contributed over 50% of India’s total solar and wind capacity additions in the first half of 2025, highlighting their central role in the country’s clean energy transition. Rajasthan leads with 37.4 gigawatts of installed renewable capacity, driven by 32 gigawatts of solar and 5.2 gigawatts of onshore wind, supported by high solar irradiance and vast desert terrain. Gujarat follows with 35.5 gigawatts, including 21.5 gigawatts of solar and 13.8 gigawatts of wind.
Battery Storage Emerges as Critical Grid Stabilisation Solution
As renewable energy’s share increases, intermittency challenges become more pronounced, making battery energy storage systems absolutely essential rather than optional. Between 2022 and May 2025, India auctioned approximately 12.8 gigawatt-hours of battery energy storage system capacity for both hybrid and standalone applications. In the first half of 2025, 5.4 gigawatts of collocated solar-BESS and 2.2 gigawatts of standalone BESS were awarded to developers, marking the country’s highest BESS allocation to date.
Battery prices have dropped significantly over the past decade, making storage economically viable. The levelised cost of storage for BESS with two-to-four-hour capacity is estimated between Rs 4.0 to 7.0 per unit—a substantial improvement from Rs 8 to 9 per unit in 2022, though still slightly higher than pumped storage hydropower. However, BESS projects offer lower execution risks and faster deployment compared to traditional pumped hydro installations, making them increasingly attractive for grid operators.
Government incentives are accelerating adoption. The government has introduced Rs 91 billion in viability gap funding support for 43.2 gigawatt-hours of BESS capacity, alongside a waiver of interstate transmission charges for BESS projects collocated with renewable energy plants commissioned on or before June 30, 2028. Production-linked incentive programmes supporting manufacture of 50 gigawatt-hours of Advanced Chemistry Cell batteries with Rs 181 billion in budgeted outlays further strengthen domestic manufacturing capabilities.
Adani Group announced a pioneering 1,126 megawatt/3,530 megawatt-hour BESS project in November 2025, entailing deployment of more than 700 BESS containers, which will be the largest BESS installation in India and one of the world’s largest single-location BESS deployments. The group plans to deploy an additional 15 gigawatt-hours of BESS capacity by March 2027, with a long-term target of 50 gigawatt-hours total over the next five years. This scale of ambition reflects growing private sector commitment to building resilient energy ecosystems aligned with India’s net-zero goals.
ICRA’s senior vice president, Girishkumar Kadam, observes that whilst gains are impressive, delays in grid connectivity and power purchase agreement signing are emerging as execution challenges requiring immediate focus to sustain growth momentum. The focus on integrated solutions—combining renewable generation with storage and grid upgrades—underpins the rollout of round-the-clock, firm, and dispatchable renewable energy projects, which accounted for about 90% of renewable capacity awarded in the first eight months of FY 26.
Transmission Bottlenecks Threaten to Constrain Renewable Integration
Despite spectacular capacity additions, India’s renewable energy ambitions face genuine infrastructure constraints. Efficient transmission connectivity continues being a critical bottleneck—a lack of adequate infrastructure delays power evacuation from renewable-rich states to demand centres. Kadam highlights that addressing interstate and intrastate grid strengthening is “extremely critical” to accommodate the rising renewable influx.
About 40–45 gigawatts of capacity awarded is yet to be signed off with power purchase agreements by various agencies, signalling upcoming bottlenecks around contract finalisation and grid readiness. The ratio of electric vehicles to public chargers increased sharply—a parallel infrastructure challenge that illustrates how India’s infrastructure development struggles to match the pace of clean technology adoption. PPA signing delays plague BESS projects particularly, as distribution utilities expect further price reductions in a rapidly evolving competitive market. In January 2025, the Central Electricity Regulatory Commission cancelled Solar Energy Corporation of India’s 500 megawatt/1,000 megawatt-hour standalone BESS tender due to significant delays in signing project agreements.
However, only about 219 megawatt-hours of BESS capacity is reported operational despite 12.8 gigawatt-hours being auctioned between 2022 and May 2025, leaving a large pipeline of projects under construction. Aggressive underbidding in auctions—potentially resulting from expectations of unrealistic falls in battery prices and participation from inexperienced players—could jeopardise successful commissioning of projects. The complex nature of hybrid project contracts, such as firm and dispatchable renewable energy contracts, causes further delays.
The Central Electricity Authority estimates that 411.4 gigawatt-hours of energy storage will be needed by 2031-32, with 236.2 gigawatt-hours from battery energy storage systems and 175.2 gigawatt-hours from pumped-hydro storage. This requirement demands coordinated efforts across government, industry, and financial sectors to accelerate deployment whilst maintaining quality standards. The government has issued advisories to collocate minimum two-hour battery storage with solar projects and stipulated energy storage obligations applicable to distribution utilities, gradually increasing from 1% in 2023-24 to 4% by 2029-30.
Economic and Environmental Transformation Reshaping India’s Energy Future
The accelerated integration of renewables isn’t only transforming India’s electricity mix—it’s catalysing economic growth, job creation, and environmental sustainability simultaneously. India’s expanding capacity from non-fossil fuel energy sources directly supports commitments under the Paris Agreement to reduce carbon intensity by 45% from 2005 levels by 2030. With India aiming for 500 gigawatts of renewables by 2030, including 40% electricity from non-fossil sources, this transition will significantly cut greenhouse gas emissions whilst supporting economic development.
Coal continued to dominate India’s power system by October 2025, accounting for 43.22% of the nation’s total installed capacity. However, India is now inching closer to its goal of sourcing 50% of its installed power capacity from clean energy sources. The renewable sector enjoys a “stable outlook” supported by rising demand from commercial and industrial customers prioritising sustainability. Recent market data shows financial upgrades in renewable companies outweigh downgrades—a clear sign of sector health and growing investor confidence.
Investment commitments are substantial. India is set to invest over $360 billion in renewable energy and infrastructure by 2030, with $190 billion to $215 billion needed to achieve 500 gigawatts of renewable capacity, whilst an additional $150 billion to $170 billion will be required for electricity transmission and storage. India’s renewable energy sector has attracted foreign direct investment amounting to approximately £21.90 billion from April 2000 to March 2025, demonstrating sustained international confidence in India’s clean energy trajectory.
Renewable expansion and storage developments drive employment across manufacturing, project execution, and maintenance ecosystems. Innovations in energy storage, smart grids, and hybrid renewable projects are positioning India as a global clean-tech hub. According to the International Energy Agency, India’s annual renewable capacity additions through 2030 are expected to increase more quickly than any other major economy, including China, with capacity additions potentially quadrupling from 15 gigawatts in 2023 to 62 gigawatts in 2030.
India’s march toward generating over a third of its power from renewable sources by 2030 embodies a defining chapter in its energy history. The blend of aggressive capacity building, supportive policies, advancing storage solutions, and transmission enhancements shapes a future where clean, reliable power fuels economic growth and environmental stewardship. Challenges of transmission bottlenecks, PPA delays, and cost pressures remain real but manageable through concerted government, industry, and financial sector collaboration. The rise of battery energy storage systems exemplifies how innovation can smooth the path toward a more resilient and sustainable grid. As Girish Kumar Kadam notes, “sustained reductions in battery costs and policy incentives will drive wider adoption of storage, which is critical to balance the grid and enhance renewable share.” India’s energy transition narrative is unfolding with pace and precision—timely execution will determine how brightly this story shines for decades to come, transforming not just India’s grid but potentially serving as a model for emerging economies worldwide navigating their own clean energy transitions.