India’s electricity transition unfolds unevenly across states

India’s electricity transition at the sub-national level is no longer marked by a few leading states, but rather wider, albeit uneven, progress across states, according to a new joint report by the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember.

The third edition of IEEFA and Ember’s Indian States’ Electricity Transition (SET) report, based on a three-dimensional framework, highlights that while some states are continuing to advance steadily in the fiscal year (FY) 2025, others have built momentum and a strong foundation for rapid progress. The uneven progress is owing to differences in resources, development priorities and institutional capacities.

“All the 21 states assessed have advanced on multiple fronts, even as the pace and areas of focus vary,” says Vibhuti Garg, Director – South Asia, IEEFA, and a co-author of the report.

“Such divergence is inevitable at the sub-national level given the structural and historical factors, including differences in resource endowment, development legacies, states’ fiscal and economic conditions, rural-urban composition, and institutional capacity within the power sector,” she adds. “Going forward, understanding these state-level differences and gaps in progress is essential for designing targeted policies and interventions.”

Co-author Ruchita Shah, Energy Analyst, Ember, says, “India’s electricity transition is maturing into a multi-speed transition, where instead of a single leader across all areas, we are witnessing new leaders in specific areas. This requires a more targeted approach to policies and interventions to ensure the momentum is evenly spread.”

Karnataka, Himachal Pradesh and Kerala are top performer in the decarbonisation dimension of the SET 2026 evaluation. This dimension assesses states’ progress in shifting to renewable electricity, improving energy efficiency, and decoupling growth from emissions. Tamil Nadu, Maharashtra and Rajasthan also show progress through energy efficiency interventions.

Delhi and Haryana continue to perform strongly in terms of how prepared and well-functioning their power ecosystems are, driven by factors such as robust distributed solar adoption, reliable power supply, and relatively sound DISCOM performance. Chhattisgarh and Bihar, too, stood out in this dimension due to improvements in their DISCOM performance since the SET 2024 analysis.

In FY2025, Chhattisgarh recorded a negligible power supply shortage of 0.07%, while Bihar recorded the highest percentage of progress in smart meter deployment (78% of its sanctioned meters) under the Revamped Distribution Sector Scheme (RDSS) as of March 2025. Assam, too, emerged as a notable performer, completing installation of 46% of its sanctioned smart meters under RDSS.

“For states with potential to improve on this dimension, targeted reforms could unlock faster progress. Strengthening DISCOM finances, ensuring timely subsidies, adopting cost-reflective tariffs, and enhancing billing and collection through digitisation and smart metering will help reduce risk perception and enable DISCOMs to scale renewable energy procurement effectively,” says co-author Saloni Sachdeva Michael, Clean Energy Specialist, IEEFA.

Andhra Pradesh, Uttar Pradesh and Rajasthan are the strongest performers in the market enablers dimension that examines state initiatives supporting adoption of EVs and green hydrogen, and measures like green tariffs and energy storage to accelerate the transition to renewable energy. Their performance was supported by updated renewable energy policies, adoption of green tariffs and solar-hour-aligned time-of-day (ToD) tariffs. Uttar Pradesh demonstrated strong momentum in EV deployment, while Andhra Pradesh and Rajasthan also made moderate progress in this area.

Delhi recorded the highest EV adoption rate at 11.6%, while Assam followed closely with a strong 11% adoption rate in FY2025, reflecting notable progress. Assam also has an active renewable energy policy along with solar-hour-aligned ToD tariffs.

Bihar introduced a green tariff provision for FY2026 and created a conducive policy environment for renewable energy (targeting around 24 GW by FY2030) and EV adoption (8.2% in FY2025). It also offered a ToD tariff mechanism. While the state does not yet have operational energy storage capacity, it has made efforts via auctions to integrate storage into its portfolio. It can also now build momentum on its draft green hydrogen policy and accelerate its transition by utilising more of its renewable potential and increasing clean power procurement.

“States such as Maharashtra and Rajasthan need to strengthen DISCOM operations, boost short-term market participation, expand distributed solar and smart meters deployment to better prepare their power ecosystem for the transition. On the other hand, Haryana and Himachal Pradesh need to accelerate mobility transitions, deploy energy storage capacities and strengthen ToD tariff and green tariff mechanisms to progress on their transition journeys,” Ruchita Shah adds.

Meanwhile, West Bengal, Telangana, and Jharkhand are among the states that remained in the early stages of transition. “These states face structural barriers and will require foundational interventions, like institutional capacity building, improved DISCOM finances, updated planning frameworks and clear, and long-term policy signals, to transition effectively,” says co-author Tanya Rana, Energy Analyst, IEEFA.

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