India’s installed renewable energy capacity to reach 250 GW by March 2026

India's installed renewable energy capacity, including large hydro, is forecasted to reach 250 GW by March 2026, up from 201 GW as of September 2023, according to a report released on Tuesday.

The increase in capacity will be driven by a robust project pipeline exceeding 80 GW, thanks to a significant uptick in tendering activity during FY24, as noted by credit ratings agency ICRA. Tendering activity has remained strong in the current fiscal year, aligning with the government's target of 50 GW in annual bidding, set in March 2023.

The growth in renewable energy (RE) capacity is also supported by favorable prices for solar PV cells and modules, which are expected to push additions to over 26 GW in FY2025, compared to 19 GW in FY2024. This is set to rise further to 32 GW in FY2026, primarily driven by solar power, especially ahead of the expiration of the waiver on inter-state transmission system (ISTS) charges in June 2025, according to ICRA’s Girishkumar Kadam, Senior Vice President and Co-Group Head of Corporate Ratings.

In addition to the utility-scale projects, ICRA anticipates significant contributions from the rooftop solar and commercial and industrial (C&I) sectors in expanding RE capacity.

This expansion in renewable energy is expected to increase the share of RE, plus large hydro, in India’s total electricity generation from 21% in FY2024 to over 35% by FY2030. Kadam emphasized the importance of developing adequate energy storage solutions to integrate the growing share of RE, as their generation is intermittent.

Furthermore, central nodal agencies are focusing on awarding projects for round-the-clock (RTC) renewable energy supply and firm dispatchable renewable energy (FDRE), which can help mitigate the intermittency challenges. This can be achieved through hybrid renewable energy projects coupled with energy storage systems, the report added.