India’s renewable energy transition is at a crossroads. While solar and wind continue to anchor capacity growth, emerging segments such as storage, hybrids, biofuels and green hydrogen are increasingly shaping the next stage of expansion. Union Budget 2026-27 reinforces this shift, with higher allocations (Rs 329.14 billion) to the Ministry of New and Renewable Energy (MNRE) for renewable deployment.
This article provides an overview of the current renewable energy landscape, highlighting the market trends, domestic manufacturing status and growing digitalisation shaping India’s transition towards a greener and more resilient energy future…
Solar
As of January 31, 2026, as per the MNRE, cumulative solar capacity reached 140.6 GW, the highest among renewable segments. Solar led capacity expansion during the year, adding 35 GW during April 2025 to January 2026 – the fastest pace recorded so far.
The segment has also seen a rapid shift towards distributed solar. Under the PM Surya Ghar scheme, 6.02 million applications have been received (as of February 9, 2026), with 2.33 million installations completed, adding 8,555 MW. Subsidies worth Rs 165.64 billion have been disbursed so far. The PM-Kusum scheme also witnessed record progress. As on November 30, 2025, a total of 10,203 MW has been installed under all components of the scheme, with a total of 2,042,443 beneficiaries. As per the demand received from the states, Rs 71.06 billion has been released under the scheme.
On the manufacturing front, the Approved List of Models and Manufacturers (ALMM)-listed module capacity has reached 162.11 GW (February 7, 2026), while installed solar cell capacity stands at 26.35 GW (as per a Lok Sabha question dated July 30, 2025). This solar cell manufacturing landscape is poised for further expansion, supported by recent policy developments. At the same time, digitalisation is becoming central to solar asset management. Advanced analytics, artificial intelligence (AI)-driven forecasting, remote monitoring and automation are enhancing operational precision, optimising performance and lowering life cycle costs across utility-scale and distributed portfolios.
Together, expanding domestic manufacturing capabilities and smarter, tech-enabled asset management, alongside record installations and strong distributed solar uptake, signal sustained sectoral momentum, keeping India on track towards its 280 GW by FY 2030 solar target.
Wind
As of January 31, 2026, India’s wind power capacity stands at 54.6 GW, the second largest renewable segment. Between April 2025 and January 2026, 4,612.58 MW has been added. Since FY 2025-26, discovered utility-scale wind tariffs have ranged between Rs 3.43 per kWh (Gujarat Urja Vikas Nigam Limited’s 250 MW Phase X auction) and Rs 3.97 per kWh (Solar Energy Corporation of India’s 600 MW Tranche XVIII auction). This activity has translated into a robust pipeline. As per the Central Electricity Authority’s December 2025 quarterly report, 26.27 GW of standalone wind and 28.14 GW of hybrid wind projects are under construction, accounting for 17.7 per cent and 19.7 per cent of their respective pipelines.
Offshore wind gained policy traction in 2024, but momentum slowed in August 2025 when SECI cancelled two offshore tenders, citing limited developer participation, despite viability gap funding support and extended timelines.
On the manufacturing front, India has emerged as the world’s third largest wind manufacturing hub, according to GWEC’s India Wind Report 2025. Capacity expanded from 12 GW in 2022 to 20 GW in 2024 – a 74 per cent increase, enabling India to meet nearly 10 per cent of global wind demand.
At the same time, digitalisation in wind operations and maintenance is transforming the industry by enabling remote monitoring, predictive maintenance and automation through AI analytics, digital twins, drones and robotics. These technologies improve efficiency, reduce downtime and lower reliance on manual intervention, helping optimise generation performance and life cycle costs as assets grow in scale and complexity.
Going forward, achieving long-term energy transition goals will require scaling annual wind installations to 10-15 GW by 2030, accelerating offshore deployment and maximising onshore potential – backed by strong domestic manufacturing and smart, technology-enabled asset management.
Bioenergy
India’s bioenergy sector is steadily gaining traction, with the total installed capacity reaching 11.6 GW as of January 31, 2026. Maharashtra is leading with 2,998.3 MW of installed bioenergy capacity, followed by Uttar Pradesh and Karnataka at 2,310.39 MW and 1,917.05 MW respectively. To harness the full potential of the segment, newer areas such as compressed biogas (CBG), ethanol blending and biomass co-firing in thermal plants have received strong policy and industry backing.
The uptake of CBG projects has shown positive momentum in recent years, even though overall progress falls short of the ambitious initial target of setting up 5,000 CBG plants and achieving 15 million metric tonnes (mmt) of CBG production by 2023-24 under the Sustainable Alternative Towards Affordable Transportation scheme. Under the GOBARdhan scheme, 190 CBG plants have been commissioned as of February 13, 2026. Furthermore, the ethanol blending segment has slowly matured, with the country achieving 20 per cent of ethanol blending in petrol in June 2025, five years ahead of the initial 2030 target. Overall, with strong policy support and emerging subsegments, bioenergy is becoming a key pillar of India’s clean energy push.
Hydropower
According to the MNRE, the installed large hydro power and small-hydro power capacities in the country stand at 51.2 GW and 5.16 GW respectively as of January 31, 2026, up from 41 GW and 4.06 GW respectively in March 2015. However, the contribution of large hydro to the total installed power capacity has declined from 16 per cent to around 10 per cent during the same period. As per the CEA, large- hydro generation reached 142,187.03 MUs during April-December 2025, reflecting a 13.3 per cent increase over the same period in the previous year. Meanwhile, small-hydro generation rose by 5.23 per cent to 10,277.39 MUs.
Pumped storage project (PSP) uptake has shown renewed momentum. As per the CEA, as of December 31, 2025, India has a total of 82 PSPs aggregating 105.46 GW at various stages of development. Such renewed focus is timely, as PSPs are indispensable in providing clean balancing power, making their accelerated deployment central to India’s grid reliability and energy transition.
Green hydrogen
Green hydrogen is emerging as a catalyst in India’s transition to a low-carbon economy. The National Green Hydrogen Mission is the backbone of this transition, providing a clear road map for domestic uptake as well as export-oriented growth.
The past year witnessed strong bidding activity, particularly for green hydrogen and green ammonia under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme. In March 2025, SECI announced the results of its auction under the SIGHT programme (Mode 1, Tranche II) to select producers for setting up green hydrogen production facilities in India. In September 2025, SECI announced results of the Tranche 2A green ammonia auction under SIGHT Mode 1 for the uptake of green ammonia by fertiliser companies. The lowest tariff discovered was Rs 49.75 per kg of green ammonia. This marked a significant milestone, with prices only marginally higher than prevailing grey ammonia costs, indicating rapid progress towards cost competitiveness.
Going forward, the focus should be on scaling pilots. Furthermore, continued tendering under the SIGHT programme, combined with a maturing green ammonia market, is likely to draw stronger investment in 2026.
Battery storage and hybrids
Batteries are emerging as a key technology in India’s power transition, offering a flexible solution to the challenges of a high-renewables grid. The year 2025-26 marked a decisive scale-up phase for India’s standalone BESS market, with around 16 auctions being conducted by a mix of central and state procuring agencies.
During this period, the lowest (L1) tariffs discovered for two-hour standalone BESS ranged from Rs 148,000 per MW per month (Transmission Corporation of Andhra Pradesh’s 1,000 MW/2,000 MWh) to Rs 280,000 per MW per month (GUVNL’s 500 MW/1,000 MWh). Overall, L1 tariffs for four-hour duration storage ranged from Rs 285,000 per MW per month (Rajasthan Rajya Vidyut Utpadan Nigam Limited’s 500 MW/2,000 MWh auction) to Rs 444,000 per MW per month (Bihar State Power Holding Company Limited’s 125 MW/500 MWh) during the period. For both two-hour and four-hour standalone BESSs, the auction outcomes reflect that higher capacity tenders witnessed comparatively lower per MW per month tariff.
There has also been an increased focus on the uptake of round-the-clock (RTC), firm and despatchable renewable energy (FDRE), and hybrid projects as utilities and commercial and industrial clients both demand firm clean energy. During the
period January 2025-February 2026, India witnessed two RTC auctions. The L1 tariffs ranged from Rs 4.35 per kWh (Railway Energy Management Company Limited’s 1 GW) to Rs 5.06 per kWh (SECI’s 1.2 GW). During the same time period, three auctions were conducted in the FDRE space. The L1 tariffs ranged from Rs 4.82 per kWh (SJVN Limited’s 1.2 GW FDRE-03) to Rs 8.5 per kWh (SECI’s 8 GWh FDRE-VI). In line with this upward tariff trend, FDRE project tenders and auctions are expected to see significant growth in the coming years, as consumers increasingly demand reliable and consistent power supply. Meanwhile, three auctions have been conducted in the hybrid space. The L1 tariff was Rs 3.35 per kWh for NTPC Limited’s 1.2 GW inter-state transmission system (ISTS). The highest tariff of Rs 3.41 per kWh was observed in NHPC Limited’s 1.2 GW hybrid ISTS.
The way forward
With Budget 2026-27 increasing allocations for renewables, storage and green hydrogen, and reducing input costs by reducing basic customs duty on select technologies, policy intent is clearly aligned with the sector’s evolving needs. The priority now is translating fiscal support into timely execution – scaling firm and flexible capacity, accelerating offshore wind and storage deployment, and strengthening domestic manufacturing ecosystems.
Sakshi Bansal
