Key Takeaways
- India’s renewable energy share is projected to grow from 21% in 2024 to 27% by 2027, driven primarily by solar power.
- The PM-Surya Ghar: Muft Bijli Yojana aims to install rooftop solar systems for 10 million households, significantly boosting solar capacity.
- Despite the growth in renewables, coal remains the dominant energy source, providing 74% of the power mix in 2024, though this is expected to decline.
India’s Renewable Energy Landscape
India is set to increase its renewable energy share from 21% in 2024 to 27% by 2027, with solar photovoltaic (PV) technology leading the transition. The International Energy Agency (IEA) forecasts that solar PV will see growth exceeding 28% between 2025 and 2027.
To facilitate this transition, the government launched the PM-Surya Ghar: Muft Bijli Yojana in February 2024. This initiative aims to establish rooftop solar systems capable of generating 300 kWh monthly for 10 million households, contributing an expected 30 GW of capacity. The financial commitment for this scheme is ₹70,000 crore, which includes capital subsidies of up to 60% and incentives for distribution companies (Discoms) to promote solar energy use.
In 2024, the Electricity (Rights of Consumers) Rules were revised to make the installation of solar plants more efficient. Systems under 10 kW can now be approved without the need for feasibility studies, and failure by Discoms to process applications within 15 days results in automatic approval, expediting implementation.
The National Electricity Plan unveiled in October 2024 aims to transmit 500 GW of renewable energy by 2030, increasing to 600 GW by 2032. This plan incorporates 47 GW of battery storage and 31 GW of pumped hydro storage, alongside the development of infrastructure for transporting green hydrogen and ammonia.
Wind energy is also projected to grow significantly, with a compound annual growth rate (CAGR) of 11% anticipated from 2025 to 2027, backed by a ₹7,450 crore investment to construct one GW of offshore wind capacity off the coasts of Gujarat and Tamil Nadu. Hydropower is also set for expansion, with the potential for 21.1 GW identified, and financial support of ₹4,140 crore designated for its development.
Nuclear power capacity, currently at 8.2 GW, is expected to triple to 22.5 GW by 2032, with ongoing advancements in reactor technology enhancing localized power generation.
Despite the spread of renewables, coal remains predominant in India’s energy mix, accounting for 74% of electricity in 2024. This figure is expected to decrease to 67% by 2027, as coal power growth slows from a CAGR of 4% (2018-2024) to 2% (2025-2027). Gas-fired power is witnessing robust growth as well, projected to average 9% per year through 2027, with total thermal capacity increasing significantly.
In 2024, electricity demand rose by 5.8% due to economic growth and increased cooling needs during heatwaves, reaching a record peak of 250 GW. To prepare for an expected peak demand surpassing 400 GW by 2030, India is set to depend on non-fossil fuel sources for 65% of its energy needs, reinforcing its commitment to a sustainable energy future.
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