Renewable Energy Capacity India 2026: 253.96 GW Achievement – Economic Survey 2025-26 Analysis
India's renewable energy sector has achieved remarkable growth, with total installed capacity reaching 253.96 GW, positioning the country as a global leader in clean energy transition. The Economic Survey 2025-26 examines India's clean energy achievements while emphasizing the need for sequencing, system readiness, and finance reforms to deliver a green, competitive growth path. This article explores India's renewable energy progress, challenges, and the road to sustainable energy security.
The Scale of Achievement: 253.96 GW
India's total installed renewable energy capacity has reached 253.96 GW, a figure that would have seemed aspirational just a decade ago. This includes solar power, wind power, small hydro, biomass, and waste-to-energy installations.
Solar power has been the fastest-growing component, with India adding more solar capacity than most countries' total power systems. Large solar parks, rooftop installations, and floating solar projects have all contributed to this expansion.
Wind power, where India was an early mover, continues to grow though at a more measured pace than solar. Newer, larger turbines are replacing older ones, increasing energy yield from the same land area.
This capacity represents about 45 per cent of total installed power generation capacity, meaning renewable sources now constitute the largest segment of India's power mix. This transformation has occurred while total electricity demand has continued to grow strongly.
The Economic Survey 2025-26 lists India's clean energy achievements including this capacity figure as part of its discussion of environment and climate change.
Why Renewable Energy Matters for India
India's push for renewable energy is driven by multiple imperatives beyond climate commitments. Energy security ranks foremost, as India imports over 80 per cent of its crude oil and significant coal and natural gas. Renewable energy from domestic sunshine and wind reduces this import dependence.
Economics increasingly favor renewables. Solar and wind power costs have declined dramatically, making them competitive with or cheaper than new coal-fired generation. For a country building new power capacity to meet growing demand, renewables offer cost-effective options.
Job creation accompanies renewable deployment. Manufacturing, installation, and maintenance of solar panels and wind turbines create employment. India has also developed significant manufacturing capability in solar equipment, though complete self-sufficiency remains a goal.
Air quality benefits from displacing fossil fuel combustion with clean electricity generation. Given the health burden of air pollution in Indian cities, cleaner power generation contributes to public health improvement.
Climate commitments under the Paris Agreement require India to reduce emissions intensity and increase the share of non-fossil fuel capacity. Renewable energy growth directly supports these commitments.
Solar Power: The Growth Engine
Solar power has been the primary driver of India's renewable capacity expansion. From negligible levels a decade ago, solar capacity has grown to over 90 GW, making India a major solar power country globally.
Large solar parks in states like Rajasthan, Gujarat, and Tamil Nadu host gigawatts of capacity on contiguous land. These parks benefit from scale economies in grid connection and shared infrastructure.
Rooftop solar has grown more slowly than utility-scale solar but represents significant potential. Residential, commercial, and industrial rooftops across India offer space for distributed generation that reduces transmission losses and grid dependence.
PM Surya Ghar promotes rooftop solar adoption through subsidies and simplified procedures. The scheme aims to install solar panels on crores of households, making consumers into producers of electricity.
Floating solar on water bodies addresses land constraints while benefiting from water cooling that improves panel efficiency. Installations on reservoirs and lakes have been commissioned, with more under development.
Wind Power: Established and Evolving
Wind power was India's first major renewable success story, with significant capacity built since the 1990s. Current wind capacity exceeds 45 GW, concentrated in states with favorable wind resources like Tamil Nadu, Gujarat, Maharashtra, and Karnataka.
The wind sector is evolving through repowering, replacing older, smaller turbines with modern, larger ones. A single modern 3 MW turbine can replace several older 250 kW units while generating more power from the same wind resource.
Offshore wind represents a future growth frontier. India's long coastline offers substantial offshore wind potential, though costs and technical challenges are greater than onshore installations. Initial offshore projects are in development.
Hybrid projects combining wind and solar on the same land optimise land use and grid infrastructure. Wind typically generates more at night and during monsoon, while solar peaks mid-day in clear weather, creating complementary generation profiles.
Green Hydrogen: The Next Frontier
The Economic Survey 2025-26 mentions mission-mode platforms in green hydrogen as an example of entrepreneurial state action. Green hydrogen, produced by electrolysis of water using renewable electricity, offers a pathway to decarbonise sectors difficult to electrify directly.
The National Green Hydrogen Mission aims to make India a global hub for green hydrogen production and export. With abundant renewable energy potential and competitive production costs projected, India could become a major hydrogen supplier.
Applications include ammonia production for fertilizers, steel manufacturing using hydrogen instead of coal, heavy vehicle transport, and energy storage. These represent sectors where direct electrification is challenging.
Pilot projects are underway across the hydrogen value chain, from electrolyser manufacturing to hydrogen production to end-use applications. Scaling up will require continued cost reduction in electrolysers and renewable electricity.
Challenges in the Transition
The Economic Survey 2025-26 argues for sequencing, system readiness, and finance reforms to deliver a green, competitive growth path without compromising energy security or development objectives. This nuanced approach acknowledges challenges alongside achievements.
Grid integration of variable renewable energy presents technical challenges. Solar generates only during daylight, wind varies with weather. Balancing supply and demand requires flexible generation, storage, and demand response.
The survey notes that the Net Zero transition has the potential to exacerbate inverted input costs for businesses if not managed carefully. Electricity tariff structures where industrial consumers pay higher rates to subsidise others could worsen during transition.
Manufacturing capacity for solar cells and modules remains partially import-dependent, particularly for upstream wafers and cells. Building domestic manufacturing capability is essential for supply chain security and value capture.
Financing the transition requires massive capital deployment. While costs have declined, the total investment needed for generation, grid, and storage runs into trillions of rupees.
Energy Storage: Enabling Higher Renewable Penetration
Energy storage addresses the variability challenge of renewable energy. Battery storage can absorb excess solar generation mid-day and discharge during evening peak demand. Pumped hydro storage uses water reservoirs as energy stores.
Battery costs have declined dramatically, making grid-scale storage increasingly viable. India is deploying battery storage through pilot projects and competitive bidding, with capacity expected to grow significantly.
The ACC PLI scheme for advanced chemistry cells supports domestic battery manufacturing. While primarily targeting electric vehicles, battery manufacturing capability serves grid storage applications as well.
Pumped storage hydro uses pairs of reservoirs at different elevations. Pumping water uphill stores energy, releasing it through turbines generates electricity. India has significant pumped storage potential being developed.
Regulatory and Market Reforms
Renewable energy growth has been supported by regulatory and market reforms. Renewable purchase obligations require distribution companies to source specified shares from renewable sources, creating demand certainty.
Competitive bidding for power purchase agreements has driven down tariffs, with solar and wind reaching record low levels. Reverse auctions discover efficient prices while ensuring adequate returns for developers.
Open access provisions enable large consumers to purchase renewable power directly from generators, bypassing distribution companies. This creates alternative offtake routes and expands the renewable market.
Real-time electricity markets and ancillary services markets are being developed to manage grid operations with higher variable generation shares.
State-Level Developments
The Economic Survey 2025-26 mentions renewable energy integration in states like Kerala as examples of state-level energy initiatives. Different states face varying challenges and opportunities based on their resource endowments and demand profiles.
Renewable-rich states like Rajasthan and Gujarat export power to deficit states, requiring strengthened inter-regional transmission. Interstate transmission infrastructure is being enhanced to enable this trade.
States with limited renewable resources focus on rooftop solar and efficiency improvements. Energy storage can help states manage the gap between local generation and demand.
Climate Commitments and NDCs
India's Nationally Determined Contributions under the Paris Agreement include targets for non-fossil fuel capacity and emissions intensity reduction. The 253.96 GW renewable capacity positions India well on the capacity target.
The net zero by 2070 commitment provides a long-term direction for energy transition. Achieving this requires not just electricity sector decarbonisation but addressing transport, industry, and other sectors.
International climate finance and technology transfer remain important for accelerating India's transition. The survey's discussion of maintaining development objectives while pursuing environmental goals reflects this balanced approach.
UPSC Relevance: Renewable Energy
Renewable energy connects multiple UPSC areas:
- GS-III: Energy, environment, infrastructure
- Science & Technology: Solar, wind, battery technology
- Geography: Resource distribution, regional development
- Current Affairs: Policies, targets, achievements
Practice MCQs on Renewable Energy - Economic Survey 2025-26
Q1. According to Economic Survey 2025-26, India's total installed renewable energy capacity is:
(a) 153.96 GW
(b) 203.96 GW
(c) 253.96 GW
(d) 303.96 GW
Answer: (c) 253.96 GW
Q2. Green hydrogen is produced by:
(a) Burning coal
(b) Electrolysis using renewable electricity
(c) Nuclear reactions
(d) Natural gas reforming
Answer: (b) Electrolysis of water using renewable electricity
Q3. The Economic Survey 2025-26 emphasizes that clean energy transition must:
(a) Replace all fossil fuels immediately
(b) Consider sequencing, system readiness, and development objectives
(c) Ignore economic competitiveness
(d) Focus only on solar power
Answer: (b) Consider sequencing, system readiness, and development objectives
Q4. Which renewable energy source has been the fastest growing in India?
(a) Wind power
(b) Solar power
(c) Small hydro
(d) Biomass
Answer: (b) Solar power
Q5. India's net zero target year is:
(a) 2050
(b) 2060
(c) 2070
(d) 2080
Answer: (c) 2070
Conclusion
India's renewable energy achievement of 253.96 GW capacity represents a transformation of the power sector, as documented in the Economic Survey 2025-26. This growth addresses energy security, economics, climate commitments, and employment simultaneously. However, the survey's emphasis on sequencing and system readiness reminds us that transition must be managed carefully to avoid compromising competitiveness or development. Challenges in grid integration, manufacturing, and financing require continued attention. For UPSC aspirants, understanding both the achievements and the nuanced challenges in India's clean energy transition is essential for comprehensive answers on energy and environment policy.