Infomerics Ratings expects renewable energy (RE) to account for 26% of India’s total power generation by the end of FY2026, despite softer demand conditions.
“RE capacity additions touched a record 49 GW in the 9MFY2026, keeping pace with the national target of 500 GW by FY2030. RE accounts for nearly 64% of incremental electricity generation growth during 9MFY26. Consequently, the RE share in overall electricity generation is projected to rise to 26% in FY2026, marking a 4-percentage point increase over FY2025,” said Rohit Inamdar, Chief Rating Officer at Infomerics Ratings.
The agency projects that renewables, led by solar, will account for 59% of total installed capacity by FY2032. To meet an estimated peak demand of 458 GW in that year, particularly during non-solar hours, deployment of energy storage systems — including battery energy storage systems (BESS) and pumped storage projects (PSPs) — will be critical.
Of the planned 236 GWh of BESS capacity by FY 2032, only 0.2% is operational as of June 2025, with another 9.6% (22.6 GWh) at various stages of development. India currently operates 5 GW of PSPs, with over 12 GW under construction and approximately 69 GW under development.
“BESS typically require 18–24 months for implementation, whereas PSPs involve a far longer construction cycle of 4–6 years,” says Mithun Vyas, Associate Director, Infomerics Ratings. “Delays in signing power purchase agreements (PPAs) for BESS-linked REs remains a key challenge in the run-up to FY 2032, as utilities await further cost corrections in BESS. The tariff for BESS linked RE currently remains high due to high battery cost. Therefore, the ability of Independent Power Producers (IPPs) to tie-up PPAs for BESS linked REs at remunerative tariff remains critical from credit perspective.”
That said, a significant share of the RE capacity currently under construction is expected to be contracted under the RPO framework, with distribution utilities mandated to source over 43% of their total power purchases from renewable sources by FY2030. RE capacities already connected to the grid with tied-up agreements remain insulated from offtake risk, owing to the ‘must-run’ status granted to operational RE projects, under which distribution utilities prioritize procurement from IPPs.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.