RE share in India likely to cross 35 pc by 2030

The share of India’s electricity generation from renewable energy (RE) capacity, including large hydro, is expected to cross 35% by FY30 from 22.1% in FY25, with expected incremental capacity addition of around 200 GW between FY25 till FY30, according to a report released on Thursday.
This, in turn, also hinges on the extent of implementation of the ongoing project pipeline where the projects are bid out and the PPAs are signed, the development of adequate transmission connectivity infrastructure as well as timely bidding for new RE projects, along with the power purchase agreements (PPAs) signing by Central nodal agencies, states the report by rating agency ICRA. The outlook for the renewable energy sector remains “stable,” led by strong policy support, superior tariff competitiveness and sustainability initiatives by large commercial and industrial (C& I) customers.
However, challenges remain on the execution front, including land and transmission infrastructure, delays in signing PPAs, exposure to equipment prices and distribution utility finances.
After a sizeable RE capacity of 47.3 GW awarded in FY24, which is followed by 40.6 GW in FY25, the bidding activity has slowed sharply in the current year with only 5.8 GW awarded in 8M FY26. Further, the unsigned PPA capacity remains sizeable at about 40-45 GW as on date, based on an industry channel check, the report further states.
As India grapples with variability in renewable generation, Battery Energy Storage Systems (BESS) have emerged as the important enabler for grid stability. The Government has introduced viability gap funding for BESS capacity along with extended transmission charge waivers for storage projects until 2028, the report notes.
The Central nodal agencies and state discoms have awarded standalone BESS projects aggregating to over 20 GWh since April 2024 to October 2025. Also, the share of round-the-clock (RTC), firm and dispatchable renewable energy (FDRE) and solar plus storage projects remained high at around 90% of the total RE capacity awarded in 8 months of FY26.
Further, the significant decline in battery costs over the past decade has helped reduce the cost of energy storage and adoption of BESS projects globally. Based on prevailing battery costs, ICRA estimates that the levelized cost of storage using BESS for 2-4 hours of storage is relatively high, in the range of Rs. 4.0-7.0 per unit, compared to Rs. 5.0 per unit for Pumped Storage Hydropower (PSP) projects.
This has seen a significant improvement from the level of over Rs. 8.0-9.0 per unit seen in 2022. While BESS costs for 4-hour storage remain higher than that of the PSP, the execution risks and gestation period for the BESS projects are relatively lower, the report states.