By Vrinda Gupta, Associate Director – Energy Transition, and Director – Strategy and Innovations; and Jaideep Saraswat, Associate Director – Clean Power, Electric Mobility and Emerging Technologies, Vasudha Foundation
India’s energy transition is unfolding in ways that signal not just technological change, but also a deeper shift in how the country thinks about and uses energy. Solar and wind are expanding at an unprecedented speed, helping India cross its target of 50 per cent non-fossil fuel capacity in 2025, five years ahead of schedule. Yet, India’s transition is not merely a unidirectional engineering and investment upgrade. It is a systems transformation; a reform that revolves around its consumers, people and ecosystem.
Policies are opening up new energy pathways. For instance, the PM Surya Ghar: Muft Bijli Yojana, launched in February 2024, has given millions of households the agency to become producers as well as consumers. In just 22 months, more than 2,300,000 households installed rooftop solar systems, with installation timelines accelerating from 125 days for the first 100,000 systems to just 20 days for 1,400,000 to 1,500,000. What began as an incentive-led scheme has evolved into a community-driven energy movement.
Markets, too, are beginning to reward cleaner choices, reflected in the nearly 150,000 electric vehicles (EVs) added every month and EV penetration reaching 8 per cent as of December 2025. Similarly, the PM Ujjwala Yojana has expanded clean cooking access, with household liquefied petroleum gas (LPG) connection coverage surging from 69 per cent to 99 per cent, delivering 330 million LPG connections. The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan (PM-KUSUM) scheme has solarised more than 1 million irrigation pumps, reducing diesel dependence and stabilising agricultural power consumption. Citizens, in turn, are adopting cleaner cooking, mobility and energy-use patterns at a pace once considered unlikely.
Together, these early shifts across policy, markets, institutions and everyday behaviour show that India’s transition is no longer a linear engineering upgrade. It is a systems transformation that revolves around people, communities and the ecosystems that sustain them. These developments point to an energy transition that is becoming more participatory, distributed and people-centred.
To ensure a resilient transition, five aspects now stand out, which are elaborated below…
States hold the key to transition
India’s states will determine the pace and depth of the energy transition. While national policy provides direction, the states have become the drivers of the energy transition. Since electricity comes under the Concurrent List, Indian states hold substantial authority and responsibility in shaping the sector. Over the past decade, most states have moved decisively with robust renewable energy and EV policies, further strengthened by bold energy storage commitments for 2030.
Renewable energy-rich states, in particular, are scaling even faster. Andhra Pradesh (aiming to reach 160 GW renewables by 2029), Rajasthan (125 GW by 2030) and Gujarat (100 GW by 2030) have issued bold capacity targets that are drawing unprecedented investments, generating green jobs and catalysing skill development. India’s federal model, often seen as administratively complex, is proving to be a powerful accelerator when aligned around a common vision.
Expand successful policy ecosystems to other sectors
India’s solar success exemplifies how coordinated policy can activate both supply and demand ecosystems. The production-linked incentive scheme, strategic basic customs duty reforms and domestic procurement mandates expanded solar manufacturing from 15 GW in 2021 to 122 GW by 2025, with projections crossing 165 GW by 2027. Rooftop solar, propelled by consumer-facing subsidies, reached 22.42 GW, transitioning from niche technology to mass-market adoption. India’s overall installed solar capacity has also increased to around 130 GW, underscoring the scale and momentum of this transformation.
With solar ecosystems now firmly established, India’s policy focus must evolve. The next frontier is renewable heat, a sector often overshadowed by electricity. Industrial process heat, residential water heating, district heating and other applications can all benefit from electrification, green hydrogen, geothermal and solar-thermal solutions. A holistic policy architecture for renewable heat would unlock decarbonisation opportunities beyond electricity, enabling cleaner industry pathways and reducing fossil fuel dependence in hard-to-abate sectors.
Balance technology with social equity
India must balance electrification with affordability. The EV transition shows that policy can balance market incentives with social equity. The cost per kWh for EVs fell by more than 35 per cent between 2020 and 2025, while state-level single-part tariffs ensured predictable and affordable charging across public stations. With over 7 million EVs already on the road and charging infrastructure expanding rapidly, EV adoption is no longer confined to metropolitan consumers.
However, the resulting rise in electricity demand must be managed with a focus on affordability. Between 2009 and 2023, electricity expenditure in 18 states grew faster than their per capita income. As EVs, electric cooking and industrial electrification expand, tariff oversight and targeted support will be crucial to prevent energy costs from outpacing household budgets. Ensuring affordability is not a constraint on electrification, it is a precondition for sustaining its momentum.
Tackle system-level challenges at scale, with speed
India’s power grid will need deeper system-level integration. India now operates one of the most technically advanced renewables-integrated grids globally, with solar penetration touching 33 per cent across continuous intervals on April 13, 2025, reflecting deep structural changes in supply. But higher renewable shares bring new integration challenges. System-level upgrades are now urgent. Advanced conductors can double or triple transmission capacity without acquiring new land. Grid-forming inverters, improved forecasting and distributed digital controls will be essential as renewable penetration deepens.
Battery energy storage systems will play an especially crucial role. The Ministry of Power recommends 10 per cent energy storage capacity with a two-hour duration for upcoming solar tenders, enabling arbitrage during periods of solar surplus, reducing curtailment, supporting frequency regulation and making peak management more economical. India has already demonstrated that high-renewable grids can operate reliably – now, the priority is to make the grid future-proof.
Balancing needs and risks
India must address emerging climate, digital and human-capital risks. Climate-related risks are intensifying: hailstorms, responsible for over 50 per cent of global solar insurance losses in terms of revenue, are increasingly common across Rajasthan, Madhya Pradesh and Maharashtra. Addressing this requires thicker-glass modules, stronger type-approval norms, automated stow mechanisms for trackers and improved hail forecasting systems.
Digitalisation brings parallel vulnerabilities. According to the India Cyber Security Threat Report 2025, the power and energy sector saw over 15,000 security detections. With every smart meter, inverter and EV charger now representing a potential attack surface, multi-layered cybersecurity protocols, secure communication architectures and specialised digital-skilling programmes are now indispensable.
India also faces a growing human-capital gap. There is no clear mapping of skill needs across manufacturing, installation, operations and maintenance, power electronics, storage operation and cybersecurity. Training programmes often fall short of industry requirements, and state capacity to scale such programmes is uneven. Stronger industry-academia partnerships and state-level implementation support will be critical.
What this means for the future
India’s lesson for the world is uncompromising: building new infrastructure alone does not secure a robust energy future. Policy, market, social and risk systems must evolve in a lock-stock-and-barrel approach to deliver a resilient, equitable and sustainable transition. As every citizen takes ownership, mainstreaming clean energy, India sets a transformative model of systems thinking for a global audience.