India’s Renewable Energy Transition: From Clean Power Expansion to a Decentralised Solar Economy

Context

The Union Minister for New and Renewable Energy highlighted India’s progress towards a decentralised, citizen-driven solar economy. Under the PM Surya Ghar: Muft Bijli Yojana, more than 21 lakh out of 65 lakh beneficiary households have achieved zero electricity bills, demonstrating the potential of renewable energy to promote energy access, affordability and self-reliance.

What is Renewable Energy?

• Renewable energy refers to electricity and heat generated from naturally replenishing sources that are not exhausted through continuous use.
• Major sources include solar, wind, hydropower, biomass and geothermal energy, along with emerging green hydrogen-based energy solutions.
• It plays a crucial role in reducing fossil fuel dependence, limiting greenhouse gas emissions and strengthening long-term energy security.

India’s Renewable Energy Progress: Key Achievements

• Rapid Solar Capacity Expansion: India’s installed solar capacity increased from approximately 2.8 GW in 2014 to nearly 171 GW, representing growth of over 6,000%.
• Declining Generation Costs: Solar tariffs have fallen from around ₹8–₹10 per unit in 2014–15 to competitive auction bids as low as ₹2.15 per unit, improving the economic viability of solar power.
• Achievement of Climate Commitments: India became the only G20 economy to achieve its commitment of deriving 50% of cumulative installed electricity capacity from non-fossil fuel sources five years ahead of its 2030 target.
• Expansion of Household Solar Energy: More than 21 lakh households under PM Surya Ghar have reported zero electricity bills, reflecting the growing role of rooftop solar installations.
• Agricultural Solarisation: PM-KUSUM has facilitated the deployment of more than 30 lakh standalone solar agricultural pumps, reducing dependence on diesel-based irrigation.

Evolution of India’s Renewable Energy Sector

India’s renewable energy development can be understood through four broad phases:

1. Initial Foundation (Before 2014)

• Renewable energy development was largely concentrated on wind power and small hydropower projects.
• Solar energy remained relatively expensive, with limited deployment and an installed capacity of around 2.8 GW.
• High capital requirements and dependence on government support restricted large-scale adoption.

2. Utility-Scale Expansion (2014–2020)

• The National Solar Mission target was expanded to 100 GW, accelerating large-scale solar development.
• Competitive bidding and reverse auctions helped reduce electricity generation costs.
• Solar parks were established in regions with high solar potential to attract private investment.

3. Manufacturing and Decarbonisation (2021–2025)

• India’s Panchamrit commitments strengthened its long-term renewable energy ambitions, including the target of 500 GW of non-fossil electricity capacity by 2030.
• Production Linked Incentive (PLI) schemes encouraged domestic solar manufacturing.
• The National Green Hydrogen Mission was introduced to support emerging clean-energy technologies and industrial decarbonisation.

4. Storage and Decentralised Energy (2026 Onwards)

• Greater emphasis is being placed on integrating renewable energy with Battery Energy Storage Systems (BESS) and pumped-storage hydropower.
• Rooftop solar installations and agricultural solarisation are expanding community-level energy generation.
• Smart grids and improved transmission infrastructure are becoming essential for providing reliable, round-the-clock renewable electricity.

Major Government Initiatives

1. PM Surya Ghar: Muft Bijli Yojana

• A ₹75,000-crore programme aimed at installing rooftop solar systems in one crore households.
• Provides financial assistance for residential solar installations and enables eligible households to generate electricity for their own consumption.
• Households can benefit from electricity bill savings and applicable net-metering arrangements.

2. PM-KUSUM Scheme

• Promotes solar-powered irrigation pumps and decentralised renewable energy generation in the agricultural sector.
• Supports the solarisation of agricultural feeders and existing grid-connected pumps.
• Helps reduce farmers’ dependence on diesel and conventional electricity supplies.

3. Production Linked Incentive (PLI) Scheme for Solar PV Manufacturing

• Encourages domestic production of high-efficiency solar photovoltaic modules.
• Strengthens India’s manufacturing ecosystem and reduces dependence on imported solar components.
• Domestic manufacturing capacity has expanded to over 225 GW of solar modules and approximately 45 GW of solar cells.

4. Green Energy Corridors

• Supports the development of transmission infrastructure for evacuating renewable electricity from generation centres to consumption hubs.
• Helps integrate renewable energy into the national electricity grid.
• Facilitates the expansion of solar and wind projects across resource-rich regions.

Challenges in India’s Renewable Energy Transition

1. Intermittency and Energy Storage Constraints

• Solar and wind generation depend on weather conditions and cannot independently ensure uninterrupted electricity supply.
• Large-scale storage infrastructure remains expensive and requires substantial investment.

Example: The Central Electricity Authority estimates that India will require around 236 GWh of battery storage capacity by 2031–32 to maintain grid stability.

2. Dependence on Imported Critical Components

• Although domestic solar module assembly has expanded, India continues to depend on external suppliers for several upstream components.
• Limited domestic production of polysilicon, ingots and wafers exposes manufacturers to international supply disruptions and price fluctuations.

3. Financial Weakness of Distribution Companies (DISCOMs)

• Accumulated losses, delayed subsidy payments and outstanding dues affect the financial capacity of state distribution companies.
• Delays in power purchase agreements and net-metering approvals discourage renewable energy investments.

4. Land Acquisition and Transmission Limitations

• Large renewable energy parks require extensive land and supporting transmission infrastructure.
• Land acquisition disputes, environmental clearances and delays in transmission projects can slow implementation.

Example: Renewable energy development in the Khavda region faces the challenge of coordinating large-scale generation projects with land-use and transmission requirements.

5. Regional and Social Inequalities

• Differences in financial capacity, technical awareness and infrastructure affect the adoption of rooftop solar across households and states.
• Smaller consumers and rural communities may face difficulties accessing upfront finance and maintenance services.

Way Forward

• Strengthen Domestic Manufacturing: Expand incentives beyond module assembly towards polysilicon, ingots, wafers, solar cells and other critical components to establish an integrated domestic supply chain.
• Accelerate Energy Storage Deployment: Promote battery storage technologies, pumped-storage hydropower and other flexible solutions to ensure reliable renewable electricity throughout the day.
• Reform DISCOMs: Improve financial discipline, introduce smart prepaid metering, reduce technical and commercial losses and ensure timely payments to renewable energy producers.
• Modernise Transmission Infrastructure: Accelerate interstate transmission networks, smart-grid technologies and Green Energy Corridor projects to connect renewable-rich regions with industrial and urban demand centres.
• Promote Inclusive Solar Adoption: Expand affordable financing, awareness campaigns and technical assistance for rural households, farmers and small businesses.
• Encourage Research and Innovation: Support indigenous development of efficient solar cells, advanced batteries, green hydrogen and recycling technologies.
• Strengthen International Cooperation: Utilise platforms such as the International Solar Alliance (ISA) to promote technology transfer, capacity building and affordable solar solutions across developing countries.

Conclusion

India’s renewable energy transition represents a shift from conventional centralised electricity generation towards a decentralised, inclusive and sustainable energy system. While rapid capacity expansion and declining solar costs have strengthened India’s clean-energy ambitions, challenges relating to storage, domestic manufacturing, grid infrastructure and DISCOM finances require sustained attention. Integrating technological innovation with institutional reforms and citizen participation will be essential for achieving energy security, climate commitments and the vision of a self-reliant green economy.

Source : The Hindu