- ICRA forecasts India’s renewable energy generation share will reach 35% by FY2030.
- The agency states that timely PPAs, stronger transmission networks, and faster project execution will drive this growth.
India’s share of renewable energy generation in the national power mix is expected to rise sharply over the next few years. Investment Information and Credit Rating Agency (ICRA) of India Limited expects the share to exceed 35% by the end of fiscal year 2030 (FY2030). This figure includes large hydropower and also marks a significant increase from the 22.1% recorded in fiscal year 2025.
The agency attributes this growth to nearly 200 gigawatts (GW) of planned new renewable energy capacity. It also emphasises the need for faster project execution, stronger transmission lines, and the timely signing of power purchase agreements (PPAs).
Girishkumar Kadam, Senior Vice President and Group Head, Corporate Ratings at ICRA, stated that India generated approximately 14% of its power from renewables last year. Hydropower provided 8%. He expects renewable energy, excluding hydro, to reach 25%–27% by FY2030.
Progress, however, remains uneven. Developers secured 47.3 GW of new renewable energy capacity in fiscal year 2024 and 40.6 GW in fiscal year 2025. In contrast, they gained only 5.8 GW in the first eight months of fiscal year 2026. Industry data shows that 40–45 GW of awarded capacity still lacks signed PPAs. This delay continues to slow sector growth.
Kadam believes that the decline in new bids and the delay in PPA signing are indicative of transmission constraints. He noted that grid curtailment in Rajasthan during peak solar hours has also raised concern. These curtailments come without compensation clauses in PPAs. Because of this, he urged authorities to strengthen storage and grid systems quickly. Renewable penetration is rising, and the infrastructure must keep up.
India is increasingly turning to Battery Energy Storage Systems (BESS) to manage fluctuations in renewable supply. The government supports this shift with viability gap funding and extended transmission charge waivers until 2028.
Between April 2024 and October 2025, central agencies and state discoms awarded more than 20 GWh of standalone BESS capacity. Round-the-clock (RTC), firm and dispatchable renewable energy (FDRE) and solar-plus-storage projects now account for nearly 90% of renewable energy awards in FY2026.
Declining battery prices have also increased the adoption of BESS. ICRA estimates that the cost of two to four hours of battery storage ranges between ₹4 and ₹7 per unit. Pumped storage hydropower averages around ₹5.
Kadam explained that BESS still incurs higher costs for long-duration storage. Even so, it offers shorter development timelines and lower execution risks. With battery prices expected to reach USD 70/kWh by 2025, total capital costs may fall to USD 120–150/kWh.
ICRA maintains a stable outlook for the renewable energy sector. Strong policy support, competitive tariffs and rising industrial demand keep the outlook positive. Yet several challenges persist. These include land acquisition delays, transmission bottlenecks, PPA backlogs, equipment price volatility and weak finances at many distribution companies.
Despite these hurdles, ratings momentum remains positive. Renewable energy firms recorded 29 upgrades and six downgrades in fiscal year 2025. In the first half of FY2026, they achieved 49 upgrades and 13 downgrades.
Companies that received upgrades delivered strong commissioning results, improved operational performance, and enhanced ownership structures. Those downgraded faced weaker generation, commissioning delays, and higher leverage, especially at holding company levels.