India’s renewable energy sector is undergoing a major transformation, targeting 500 GW of non-fossil fuel energy by 2030. In 2024, solar energy saw a record 24.5 GW capacity addition, continuing to be the dominant driver of India’s renewable energy growth and accounting for 47% of the total installed capacity.
With the Union Budget 2025-26 approaching, the solar industry anticipates key policy and financial measures to sustain this momentum. The budget is expected to increase funding for green technologies, including solar, wind, and green hydrogen.
As of November 2024, India’s cumulative installed solar capacity stood at 94.17 GW, while the total installed and pipeline solar projects reached 261.15 GW, indicating strong future growth. To maintain steady capital flow, the government should introduce tax exemptions for renewable energy investments and expand financial tools such as electricity derivatives and virtual power purchase agreements. Subsidies, innovative financial instruments, and stronger public-private and international collaborations will further solidify India’s global leadership in renewable energy. The sovereign wealth fund that the Government of India plans to establish could significantly boost renewable energy investments.
Energy storage systems are critical for ensuring grid stability and reducing dependence on imports. While the Production-Linked Incentive (PLI) scheme has bolstered battery manufacturing, additional incentives are needed to accelerate domestic capacity. Customs duty concessions and tax breaks on storage technologies can improve affordability and energy security.
Similarly, continued support for PLI schemes in solar panels, modules, and PV cells will drive self-reliance and reduce import dependency. Expanding rooftop solar under the PM Surya Ghar Yojana and strengthening digital infrastructure via the National Portal for Rooftop Solar will streamline project execution. A standardised net metering policy across states will enable businesses and households to contribute more effectively to solar power generation.
With India set to invest over INR 9 lakh crore in power transmission infrastructure by 2032, strong policy support is needed to boost domestic manufacturing and renewable energy expansion. The transmission charge waiver has been instrumental in positioning India as a renewable energy leader; its continuation is essential. The budget should allocate at least INR 5,000 crore to extend this waiver. Additionally, investing in cutting-edge technologies such as submarine cables and high-voltage direct current (HVDC) systems will help India maintain its competitive edge in the global energy landscape.
As renewable energy adoption accelerates, developing a skilled workforce is imperative. The budget should promote industry-government collaborations for workforce training under schemes like the Pradhan Mantri Kaushal Vikas Yojana. These initiatives will bridge the skill gap, create employment opportunities, and strengthen India’s solar sector in alignment with its clean energy goals.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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