India is at the forefront of a global shift towards sustainable energy, showcasing significant progress in its renewable energy journey. As of October 2024, according to a reputed agency, India’s total electricity generation capacity has reached an impressive 452.69 GW, with renewable energy contributing 201.45 GW, or 46.3 per cent, of the overall power mix.

Solar power takes the spotlight, with 90.76 GW of installed capacity, demonstrating India’s efficient use of its abundant sunlight. Wind energy follows with 47.36 GW, leveraging the country’s expansive coastal and inland wind corridors. Hydropower adds 51.99 GW, tapping into India’s extensive river networks, while biopower, contributing 11.32 GW, transforms agricultural waste and organic materials into valuable energy. These milestones underline India’s growing reliance on cleaner, non-fossil fuel energy sources and its commitment to a sustainable energy future.

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At COP-26 in Glasgow, India announced bold targets, including achieving net-zero emissions by 2070 and ensuring 50 per cent of its electricity comes from non-fossil sources by 2030. Currently ranked fourth globally in renewable energy capacity, India has seen a remarkable 36.5 per cent compound annual growth rate in solar energy over the past 11 years. Financial innovations, such as sovereign green bonds worth Rs. 16,000 crore (US$2 billion) in FY23, green deposits, and ESG mandates, have driven substantial investments in solar rooftops, electric vehicles, and Battery Energy Storage Systems.

Legislative frameworks for renewable energy

India’s renewable energy transition is driven by ambitious government initiatives to increase clean energy production, improve energy access, and boost sustainability. Below are some key initiatives driving this change:

Green Energy Open Access Rules (GEOA Rules, 2022): Introduced on 6 June, 2022, and subsequently amended, these rules provide consumers with a connected load of over 100 kW the ability to access renewable energy through various options. These include setting up renewable energy plants, entering into power purchase agreements with developers, or establishing captive power plants. Several states, including Delhi, Karnataka, Gujarat, Tamil Nadu, Meghalaya, Himachal Pradesh, and Telangana, have adopted these rules and released their regulations.

PM-KUSUM Scheme: Launched in March 2019 and scaled up in 2024, this scheme supports farmers by providing financial assistance to set up solar power plants, installing solar agricultural pumps, and solarise existing grid-connected pumps. This enhances water and energy security for farmers and promotes the adoption of solar power in rural India.

National Green Hydrogen Mission: With Rs. 600 crores allocated in the Interim Budget of 2024-2025, this initiative focuses on promoting green hydrogen production, a crucial step in decarbonising hard-to-abate sectors like industry and transport.

PLI scheme for solar PV modules: Aiming to boost the manufacturing of high-efficiency solar photovoltaic modules, this scheme has a total allocation of Rs. 19,500 crores. It is a critical step in reducing India’s reliance on imported solar components and establishing the country as a global manufacturing hub for solar technology.

Renewable energy projects in Rajasthan: The Government of Rajasthan has signed a memorandum of understanding with NTPC Green Energy to develop 25 GW of renewable energy projects in the state, showing the increasing investment in scaling up renewable energy and creating regional energy hubs.

Steps have been taken to promote waste-to-energy: Various steps have been taken to promote waste-to-energy plants as part of India’s renewable energy goals. The Tariff Policy, 2016 mandates 100 per cent power procurement from such plants. The National Policy on Biofuels-2018 and the Sustainable Alternative Towards Affordable Transportation initiative encourage Bio-CNG production and its procurement by oil marketing companies, with usage permitted in vehicles under amended motor vehicle rules. MNRE also offers import concessions for machinery and financial assistance for waste-to-energy projects upon successful commissioning.

Tax incentives: The Indian government promotes renewable energy development through various financial incentives. Generation Based Incentives (GBI) offer financial rewards to renewable energy producers based on their output. Customs and excise duty exemptions reduce costs for importing renewable energy equipment, such as solar panels and wind turbines. Additionally, excise duties on solar water heaters and lighting, along with service tax exemptions for renewable energy projects’ construction and commissioning, further lower overall costs, encouraging businesses to adopt sustainable energy solutions.

These initiatives support India’s ambitious goals to increase renewable energy capacity and reduce carbon emissions. By promoting solar, green hydrogen, and local manufacturing of renewable technologies, the government is laying the groundwork for a sustainable, low-carbon future while ensuring energy security and economic growth.

Challenges and the way forward

India is on track to achieve 500 GW of renewable energy capacity by 2030, highlighting its commitment to sustainable development. However, several barriers hinder progress. A significant challenge is the shortage of skills in the clean energy sector, particularly in solar manufacturing. Insufficient government funding and limited training programs have caused project delays and higher costs, jeopardising the nation’s carbon reduction targets.

The continued reliance on coal further complicates this transition, with fossil fuels still dominating India’s energy mix, creating a roadblock to adopting cleaner alternatives.

Despite these hurdles, the prospects for renewable energy in India remain encouraging. India’s abundant natural resources and favourable climate provide a robust foundation for renewable energy expansion.

To unlock its full potential, India must prioritise skill development, strengthen policy frameworks, and increase financial support for clean energy projects. These measures are crucial for overcoming challenges and ensuring a seamless transition to a sustainable and energy-secure future.

Furthermore, the Indian government must continue to innovate and adapt its policies. This includes fostering public-private partnerships, investing in research and development, and enhancing regulatory frameworks to support the seamless integration of renewable energy.

India’s renewable energy journey represents a significant step toward sustainability, driven by progressive government policies and substantial investments. Despite challenges like skill shortages, financial constraints, and continued reliance on fossil fuels, India’s initiatives, such as the PM-KUSUM Scheme, National Green Hydrogen Mission, PLI Scheme for Solar PV Modules, and waste-to-energy measures highlight its comprehensive approach to energy transition. The promotion of waste-to-energy plants aligns with India’s goals of reducing waste and generating sustainable energy. By addressing these challenges and scaling innovation, India is well-positioned to become a global leader in renewable energy, championing a sustainable and inclusive future.

Kumar Shashwat Singh Sawno is Principal Associate and Rahul K. Kanoujia is Sr. Associate at S&A Law Offices, Delhi.