India Adds 50GW RE Capacity with ₹2 Lakh Cr Investment in 2025; to Keep Momentum in 2026

While major powers slowed their push on renewable energy, India - often portrayed as a champion of fossil fuels - did the unthinkable. In 2025, it achieved a major climate milestone, with 50% of its installed power generation capacity now coming from non-fossil fuel sources, five years ahead of its 2030 target under the Paris Agreement signed in December 2015.

The world's fastest-growing economy now has a total installed generation capacity of about 510 gigawatts, comprising 247 GW of fossil-fuel sources and 262 GW of non-fossil fuel sources (including 254 GW from renewable energy sources).

India added around 50 GW of renewable energy capacity in 2025, backed by investments of nearly ₹2 lakh crore, taking its total non-fossil fuel capacity to about 262 GW. The government expects to sustain a similar pace of capacity addition in 2026, even as challenges related to land acquisition, right-of-way issues and delays in signing power purchase agreements continue to constrain fresh projects.

Union Minister for New and Renewable Energy Pralhad Joshi told PTI that India witnessed record growth in 2025, with about 45 GW of renewable capacity added between January and November, led by nearly 35 GW of solar installations.

"By the end of December, we will touch nearly 48-50 GW. The future is sunny and will be powered by renewables," he said, adding that momentum is expected to continue in 2026.

Industry estimates put investment requirements at around ₹4 crore per MW, implying ₹2 lakh crore for every 50 GW of capacity.

According to an IREDA study, India will require investments of about ₹30.54 lakh crore between 2023 and 2030 to meet its 500 GW non-fossil fuel target. Public sector financial institutions have already deployed about ₹10.79 lakh crore into renewable projects since 2014, including ₹2.68 lakh crore in 2024-25 alone.

"We have witnessed a record growth in the renewable energy sector in 2025. We have installed a total capacity addition of around 45 GW achieved from January to November 2025, with solar energy leading the remarkable surge with almost 35 GW. By the end of the year in December, we will touch nearly 48 to 50 GW.

"I am very optimistic about the future growth prospects of the sector. We expect to continue the momentum in the coming year in 2026," Joshi said.

The minister added that from 2014 till 2024-25, an amount of ₹10.79 lakh crores (approximately) has been deployed by public sector banks, IREDA, PFC, REC, IIFCL, SIDBI and NaBFID (excluding private banks) towards renewable energy projects.

During the 2024-25 fiscal year, an amount of ₹2.68 lakh crore (approximately) has been deployed by these institutions, he stated.

Vinay Rustagi, Chief Business Officer at Premier Energies, said that 2025 has been a highly charged year for renewables.

New project commissioning has grown by more than 50% over the previous year, with a big boost coming from PM Surya Ghar Yojana and PM Kusum scheme, he noted.

The government has prepared a roadmap to give a boost to domestic manufacturing of cells and ingot-wafers to meet the entire domestic demand, he said.

This has led to several companies announcing large investment plans in the sector. It was also a breakthrough year for storage, where the government announced another large capital subsidy scheme, leading to a spurt in storage tenders and auctions, he noted.

He pointed out that growing renewable power capacity has led to an imbalance in the grid, causing curtailment of power and delays in transmission capacity addition are slowing down project execution, particularly in Rajasthan.

He said the signing of a US-India trade treaty would help provide an attractive market avenue for Indian manufacturers.

"Outlook for the new year remains bright. We expect growth momentum in new installations to continue. More domestic manufacturing capacity is expected to come on stream, reducing the share of imports and forex outgo," he noted.

Laxit Awla, Executive Director and Chief Executive Officer, SAEL Industries Ltd, said, "2025 has been a year of profound acceleration for the Indian energy sector".

He pointed out that the power sector is now shifting its focus from capacity expansion to capacity absorption, and grid integration continues to be the sector's major challenge.

This integration gap has magnified financial constraints, leaving the required long-term investment structurally underfunded, he pointed out.

Steps like mandating Long-Duration Energy Storage (LDES) obligations alongside existing viability gap funding to establish reliable, dispatchable capacity would augment the sector's growth, he suggested.

OMC Power co-founder and CEO Rohit Chandra said, "Rising raw material costs, infrastructure gaps in remote areas, and limited access to affordable long-term financing continue to constrain scalability. Last-mile connectivity and financial viability in rural markets demand urgent attention. Investment in microgrids, storage systems, and EV charging infrastructure is critical to sustaining momentum".

Datta Infra MD Varchasvi Gagal said that India's energy transition is moving from megawatts to megaprojects — multi-GW clusters, hybrid parks, storage-linked development, and transmission integration and the coming year will be defined by scale, speed, and structural reform.

Hitachi Energy MD and CEO, India & South Asia, N Venu suggested that the focus should be on strengthening the transmission network, expediting the development of renewable energy zones, enhancing energy storage capabilities, and shifting from project-based to programme-based initiatives.

With focused efforts in 2026, India can enhance its energy security and strengthen its position in the global clean energy sector, he added.