India Renewable Energy Policy 2026: 2025 vs 2026 Outlook
India’s renewable energy policy is accelerating at an unprecedented pace. In 2025, non-fossil fuel capacity surged 22.6% to 266.78 GW, with solar capacity jumping 38.8% to 135.81 GW. In 2026, the momentum intensified — India added a record 55.3 GW of non-fossil capacity, taking the total to 283.46 GW and surpassing Brazil to become the world’s third-largest renewable energy market. Budget 2026-27 allocated ₹32,915 crore to the Ministry of New and Renewable Energy, a 30% increase over 2025-26, with solar allocations rising 32% to ₹30,539 crore. This guide compares 2025 vs 2026 capacity additions, budget allocations, FDI trends, and the roadmap to 500 GW by 2030.
Key takeaway – India Renewable Energy Policy 2025-2026: India’s non-fossil capacity reached 266.78 GW in 2025 (22.6% growth) and 283.46 GW by March 2026 — adding a record 55.3 GW in FY26, more than double the 29.5 GW added in FY25. Solar capacity crossed 150 GW in 2026. MNRE budget rose 30% to ₹32,915 crore, with solar allocation up 32% to ₹30,539 crore. FDI inflows stood at $3.02 billion in FY26. India now ranks third globally in renewable energy capacity, targeting 500 GW by 2030.
Summary: India Renewable Energy Policy – August 2026
- 2025 Capacity: Non-fossil 266.78 GW (+22.6%), Solar 135.81 GW (+38.8%), Wind 54.51 GW (+13.2%).
- 2026 Capacity (March): Non-fossil 283.46 GW, Solar 150.26 GW, Wind 56.09 GW — record 55.3 GW added.
- Global Ranking: India surpassed Brazil to become 3rd globally in renewable energy capacity.
- Budget 2026-27: MNRE ₹32,915 crore (+30%), Solar ₹30,539 crore (+32%), PM Surya Ghar ₹22,000 crore.
- FDI: $3.02 billion in FY26 (2nd highest since FY11), down 24.8% from FY25’s record $4.01 billion.
- 2030 Target: 500 GW non-fossil capacity, requiring ~US$400 billion investment.
1. 2025 – A Record-Breaking Year for Renewable Energy
India marked a historic milestone in 2025, with non-fossil fuel installed capacity rising to 266.78 GW — a 22.6% increase over 2024’s 217.62 GW, with 49.12 GW of new non-fossil capacity added during the year.
| Segment | 2024 Capacity | 2025 Capacity | Growth |
|---|---|---|---|
| Solar Power | 97.86 GW | 135.81 GW | +38.8% |
| Wind Power | 48.16 GW | 54.51 GW | +13.2% |
| Bioenergy | — | 11.61 GW | Steady growth |
| Small Hydro | — | 5.16 GW | Steady growth |
- Solar dominated the expansion, growing 38.8% to 135.81 GW — the largest contributor to India’s renewable energy portfolio.
- Wind energy grew 13.2% to 54.51 GW, continuing its steady expansion.
- Bioenergy reached 11.61 GW, including 0.55 GW from waste-to-energy off-grid projects.
- Small hydro capacity increased to 5.16 GW, supporting decentralised renewable energy development.
- Large hydro stood at 50.91 GW, including 7,175.6 MW of pumped storage for grid stability.
- India achieved the milestone of 50% cumulative installed electricity capacity from non-fossil sources in June 2025, ahead of its 2030 NDC target.
Track your renewable energy investments with Investment Wallet.
2. 2026 – Accelerating Momentum and Global Recognition
The momentum from 2025 carried into 2026 with even greater force. India added a record 55.3 GW of non-fossil fuel capacity in FY 2025-26 — the highest increase in any single year.
- Solar capacity crossed 150 GW — reaching 150.26 GW by March 2026, with 44.61 GW added during the year.
- Wind capacity reached 56.09 GW, with a record 6.05 GW added in FY26 — the highest-ever annual wind addition.
- Distributed renewable energy contributed 16.3 GW (36%) of the 44.61 GW solar installed, including 7.6 GW under PM-KUSUM and 8.7 GW from rooftop solar.
- More than 42 lakh households have benefited from solar schemes, with PM Surya Ghar accounting for 34.3 lakh installations.
- Renewable energy met 51.5% of India’s electricity demand of 203 GW on a single day in July 2025 — the highest share ever recorded.
- India surpassed Brazil to become the world’s third-largest renewable energy market.
Learn more about India’s energy transition with RBI Monetary Policy 2026.
3. Budget 2025 vs 2026 – Renewable Energy Allocations Compared
The Union Budget 2026-27 delivered a significant boost to renewable energy, with the Ministry of New and Renewable Energy receiving its highest-ever allocation.
| Allocation Head | 2025-26 (RE) | 2026-27 (BE) | Change |
|---|---|---|---|
| MNRE Total | ₹25,301 Cr | ₹32,915 Cr | +30% |
| Solar Sector | ₹24,224 Cr | ₹30,539 Cr | +32% |
| PM Surya Ghar | ₹20,000 Cr | ₹22,000 Cr | +10% |
| PM-KUSUM | ₹5,000 Cr | ₹5,000 Cr | Stable |
| Solar Grid | ₹1,000 Cr | ₹1,775 Cr | +77.5% |
| BESS VGF | ₹200 Cr | ₹1,000 Cr | +400% |
| Green Hydrogen | ₹300 Cr (RE) | ₹600 Cr | +100% |
| Green Energy Corridor | ₹800 Cr (RE) | ₹600 Cr | -25% |
- Solar remains the primary focus, with allocations rising 32% to ₹30,539 crore — the largest share of the renewable energy budget.
- PM Surya Ghar continues to dominate residential solar, increasing from ₹20,000 crore to ₹22,000 crore.
- Battery Energy Storage Systems (BESS) received a massive 400% increase to ₹1,000 crore, signalling the government’s focus on grid-scale storage.
- National Green Hydrogen Mission funding doubled from ₹300 crore (RE) to ₹600 crore.
- Solar power grid allocation jumped 77.5% to ₹1,775 crore from ₹1,000 crore.
- States’ interest-free capex loans — ₹2 lakh crore under SASCI — are now linked to renewable energy adoption, incentivising state-level clean energy deployment.
Track your renewable energy mutual funds with Investment Wallet.
4. FDI Trends – 2025 vs 2026
India’s renewable energy sector has been a magnet for foreign direct investment, though 2026 saw a modest decline from the record highs of 2025.
- 100% FDI is permitted under the automatic route for renewable energy generation and distribution projects since November 2022.
- FDI rose 50% year-on-year in FY 2023 and FY 2024, with total inflows reaching approximately $4 billion in FY 2025.
- FY 2026 FDI stood at $3.02 billion — the second-highest annual inflow since FY 2011, despite a 24.8% decline from the record $4.01 billion in FY 2025.
- The government has unveiled a fast-track FDI approval route for solar, battery and wind component manufacturing to attract further investment.
- Domestic capital has stepped up to fill the gap, with DIIs and institutional investors increasingly backing renewable energy projects.
Track your net worth and green investments with Wealth Wallet.
5. 500 GW by 2030 – The Roadmap
India is targeting 500 GW of installed non-fossil fuel capacity by 2030, a goal that will require massive investment and policy support.
- Investment requirement: Approximately US$400 billion is needed to meet the 500 GW target by 2030.
- IREDA study estimates that India will require investments of about ₹30.54 lakh crore between 2023 and 2030 to meet the target.
- PM-KUSUM 2.0 is being prepared to expand decentralised solar deployment in the agriculture sector.
- Phase III of the Green Energy Corridor is being developed to enhance renewable power integration and transmission capacity.
- GST on renewable energy equipment was reduced to 5% from 12%, and customs duty exemptions for lithium-ion cell manufacturing for BESS have been extended.
- Domestic manufacturing capacity expanded significantly — solar PV module capacity reached 172 GW, while imports declined to $758 million (till January 2026) from $2,152 million earlier.
- Power Purchase Agreements (PPAs) are in place for 230 GW out of 275 GW of installed renewable energy capacity, with 10-12 GW more expected in the next 3-4 months.
Understand the policy backdrop with RBI Monetary Policy 2026.
Quick Decision: How to Align Your Portfolio with India’s Renewable Energy Policy?
6. Key Policy Initiatives in 2026
State Incentives Linked to RE Adoption
States’ interest-free capex loans (SASCI) now tied to renewable energy consumption, incentivising state-level clean energy deployment.
BESS Viability Gap Funding
VGF for battery storage scaled up 400% to ₹1,000 crore, supporting large-scale grid storage and renewable integration.
CCUS Push
₹20,000 crore allocated for Carbon Capture, Utilisation and Storage — a new frontier in India’s decarbonisation strategy.
Polysilicon Manufacturing Policy
Government working on a policy framework to support domestic polysilicon manufacturing, reducing import dependence.
- Customs duty rationalisation — duty exemptions for energy storage systems, solar glass, nuclear power projects and critical minerals.
- Excise relief for biogas-blended CNG, supporting the transition to cleaner fuels.
- 35 capital goods for EV battery manufacturing added to the duty-exempt list.
- Small Hydro Power Development Scheme approved for FY 2026-27 to FY 2030-31.
- Draft National Electricity Policy (NEP) 2026 emphasises large-scale renewable energy integration.
Read more on How to Build Wealth Fast in India.
7. Common Mistakes to Avoid in Renewable Energy Investing
Ignoring policy risks
Renewable energy stocks are sensitive to policy changes. Stay updated on budget allocations and regulatory shifts.
Overlooking grid integration challenges
Renewable energy curtailment remains an issue — 8,133 GWh of solar power was curtailed in Q2 2026 to maintain grid security.
Chasing past performance
Solar stocks surged in 2025, but 2026 has seen mixed performance. Focus on fundamentals and diversification.
Ignoring storage and transmission
Battery storage and grid infrastructure are critical for renewable growth. Look beyond generation to the entire value chain.
Read our Budgeting Mistakes India for more financial pitfalls to avoid.
8. INDwallet Tools to Track Renewable Energy Investments
- Investment Wallet – Track your renewable energy mutual funds, ESG portfolios, and green bonds.
- Wealth Wallet – Monitor your net worth and asset allocation, including renewable energy exposure.
- Wallet Score – Get a holistic view of your financial health, including sustainability metrics.
- SIP vs Lumpsum Simulator – Plan your renewable energy fund investments.
- Investment Quest Simulator – Test different portfolio strategies with renewable energy focus.
Leave a Comment
How are you tracking India’s renewable energy policy and investments? Share your thoughts.