Under the visionary leadership of Prime Minister Narendra Modi, India has made remarkable strides in advancing its renewable energy sector, positioning itself as a global leader in the transition to clean energy. The ambitious target of achieving 500 GW of non-fossil fuel capacity by 2030 is a testament to his commitment to sustainable development and energy independence. Prime Minister Modi’s proactive approach to promoting green energy boosts India’s energy security. It plays a pivotal role in combating climate change, creating millions of green jobs, and contributing to a cleaner, more resilient future for future generations. His leadership inspires nations worldwide to accelerate their renewable energy ambitions.
India’s Commitment to Climate Change Mitigation
India has strongly committed to addressing climate change by enhancing its Nationally Determined Contributions (NDCs) under the Paris Agreement. These commitments reflect the principles of equity and the concept of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), which take national circumstances into account. In August 2022, India updated its NDC to include ambitious climate targets, such as reducing emissions intensity by 45 per cent by 2030 (compared to 2005) and achieving 50 per cent of its cumulative electric power capacity from non-fossil fuel sources by 2030. Additionally, India has pledged to promote sustainable lifestyles through the ‘LIFE’ (Lifestyle for Environment) movement. These efforts support India’s long-term goal of reaching net-zero emissions by 2070, a commitment further backed by the country’s ‘Long-term Low Carbon Development Strategy’ presented to the UNFCCC in November 2022.
Leadership in Clean Energy
India has firmly positioned itself as a global leader in renewable energy. Between October 2023 and October 2024, it added 24.2 GW of renewable energy capacity, marking a 13.5 per cent increase. This brings the total installed capacity to 203.18 GW. When including nuclear energy, the non-fossil fuel capacity rises to 211.36 GW, reflecting India’s commitment to achieving its Panchamrit goals and reducing dependence on fossil fuels. Such strides demonstrate the country’s proactive efforts toward a sustainable and greener future.
Progress Toward 500 GW by 2030
India’s renewable energy capacity has surpassed the 200 GW mark, reflecting significant progress toward its 2030 target of 500 GW of non-fossil fuel capacity. Solar energy leads the way with an installed capacity of 92.12 GW, followed by wind power at 47.72 GW, hydroelectric projects at 51.99 GW, and bioenergy at 11.32 GW. These sources account for 46.3 per cent of the country’s total electricity generation capacity. This progress highlights India’s shift from fossil fuels toward clean energy alternatives and its determination to address climate change effectively.
Sectoral Contributions to Employment
India’s renewable energy sector generated significant employment in 2023:
- Hydropower: The largest employer provided 453,000 jobs, accounting for 20 per cent of global hydropower employment.
- Solar Photovoltaic (PV): Solar PV employed 318,600 individuals, driven by the addition of 9.7 GW of capacity, making India the fifth largest in global solar installations and cumulative capacity.
- Wind Energy: Supported 52,200 jobs, bolstered by 2.8 GW of capacity added in 2023.
- Other Renewable Sectors: Biogas contributed 85,000 jobs, solid biomass 58,000, and liquid biofuels 35,000, showcasing the diversity of India’s green employment landscape.
India’s rapidly expanding solar PV manufacturing sector is poised to make it the world’s second-largest producer, further enhancing job opportunities and energy self-reliance.
Government Initiatives Driving Growth
The government has implemented several transformative policies to promote renewable energy, job creation, and sustainability:
1. National Green Hydrogen Mission
The National Green Hydrogen Mission, launched by the Ministry of New and Renewable Energy in January 2023 with a financial outlay of Rs 19,744 crore, aims to position India as a global leader in the production, usage, and export of green hydrogen and its derivatives. By decarbonising sectors such as industry, mobility, and energy, the mission seeks to reduce India’s dependence on imported fossil fuels while promoting indigenous manufacturing and innovation. With a target of producing at least 5 million metric tonnes (MMT) of green hydrogen annually by 2030, potentially expanding to 10 MMT for export, the initiative is set to create significant economic and environmental benefits. It is expected to generate substantial employment opportunities across the value chain, foster advancements in green technologies, and contribute to a robust renewable energy workforce, marking a critical step in India’s energy transition.
2. PM-KUSUM Scheme
The PM-KUSUM scheme, launched in March 2019 and scaled up in January 2024, aims to ensure energy and water security for farmers, enhance their income, reduce dependency on diesel, and mitigate environmental pollution. It has three key components: Component A focuses on setting up 10,000 MW of decentralised renewable energy-based power plants on farmers’ lands; Component B targets the installation of 14 lakh stand-alone solar agriculture pumps; and Component C involves the solarisation of 35 lakh grid-connected agriculture pumps, including feeder-level solarisation. To add 34,800 MW of solar capacity by March 2026, the scheme is supported by a central financial outlay of Rs 34,422 crore. It also has significant employment potential, with an estimated generation of 7.55 lakh job-years for skilled and unskilled workers, fostering self-employment and boosting rural livelihoods.
3. PM Surya Ghar: Muft Bijli Yojana
The PM Surya Ghar: Muft Bijli Yojana, launched by Prime Minister Narendra Modi on February 15, 2024, is a transformative initiative to revolutionise India’s energy sector by providing free electricity to households. By offering a generous subsidy of up to 40 per cent on the installation of rooftop solar panels, the scheme empowers one crore households to tap into the potential of solar energy. This initiative reduces household energy expenses and helps the government save approximately ₹75,000 crore annually in electricity costs. In addition to promoting sustainable energy, the scheme supports India’s efforts to cut carbon emissions and reduce its environmental footprint. With an expected creation of 17 lakh direct jobs across multiple sectors, the PM Surya Ghar Yojana is also set to drive economic growth, strengthen the renewable energy sector, and contribute to India’s greener, more sustainable future.
4. Production Linked Incentive (PLI) Scheme
The National Programme on High-Efficiency Solar PV Modules, under the Production Linked Incentive (PLI) Scheme, is a strategic initiative by the Ministry of New and Renewable Energy, Government of India, with an investment of Rs 24,000 crores. The scheme aims to establish large-scale manufacturing capacity for high-efficiency solar PV modules within India, reducing reliance on imports and bolstering the country’s renewable energy sector. By offering production-linked incentives over five years, the programme encourages the adoption of cutting-edge technology and establishing integrated manufacturing plants, promoting quality control and competitiveness. Furthermore, the scheme aims to foster a local supply chain for materials, generate employment, and drive technological self-sufficiency in the solar manufacturing sector.
5. Green Energy Corridors (GEC)
The Green Energy Corridors (GEC) initiative is a strategic effort to establish an efficient intra-state transmission system for renewable energy projects across India. It provides Central Financial Assistance (CFA) to develop the essential transmission infrastructure, enabling the seamless evacuation of power generated from renewable energy sources. The initiative is implemented in two phases. Phase I involves eight renewable-rich states—Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, and Tamil Nadu—where State Transmission Utilities (STUs) focus on creating a robust transmission network. Phase II extends to seven states, including Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu, and Uttar Pradesh, further enhancing the transmission capabilities to support expanding renewable energy capacity and ensuring grid stability. Through these corridors, the GEC initiative aims to optimise renewable energy integration into the national grid, advancing India’s energy security, environmental goals, and sustainable energy practices.
6. Skill Development for a Green Economy
The Human Resource Development (HRD) scheme for the renewable energy sector, from 2021-22 to 2025-26, aims to institutionalise education and training in renewable energy to meet the growing demand for skilled professionals. The initiative focuses on various programs, including short-term training, skill development, fellowships for higher studies, and enhancing education and training infrastructure. A key component of the scheme is the establishment of Renewable Energy Chairs in academic institutions and a National Renewable Energy Internship Programme. These efforts are designed to ensure a consistent supply of qualified manpower supporting India’s ambitious renewable energy goals and driving the transition to a sustainable energy future.
The Renewable Energy Certificate (REC) mechanism is a market-driven tool introduced to incentivise renewable energy generation and ensure compliance with Renewable Purchase Obligations (RPO). By creating a market for renewable energy certificates, the scheme bridges the gap between renewable energy generation in different states and the obligations of entities to meet their RPO targets. The revenue generated from the sale of RECs and income from electricity sales provides a financial incentive for renewable energy producers. This mechanism encourages wider participation in the renewable energy sector, driving the nation closer to its sustainability goals while enabling flexibility for entities to meet their renewable energy requirements.
Major Progress in Solar and Wind Energy
Solar Energy
India’s solar energy sector has been a cornerstone of its renewable energy strategy. 2024 solar capacity grew by 20.1 GW, marking a 27.9 per cent increase to 92.12 GW. Including projects under implementation, the total capacity has expanded to 250.57 GW. Initiatives under the International Solar Alliance (ISA) have further bolstered this growth, encouraging global collaboration, innovative financing, and skill development in solar technologies.
Wind Energy
India’s wind energy capacity increased by 7.8 per cent, from 44.29 GW in 2023 to 47.72 GW in 2024. With a robust pipeline of 72.35 GW, the sector promises steady growth, ensuring a diversified renewable energy portfolio.
Hydro and Nuclear Contributions
Hydropower contributes 51.99 GW to India’s renewable capacity, while nuclear energy adds 8.18 GW. These sources enhance the resilience of India’s energy mix, supporting the country’s comprehensive green energy transition.
Role of the International Solar Alliance (ISA)
India’s leadership in the ISA, headquartered in the country, has been instrumental in promoting global solar energy adoption. With 120 member countries, the ISA has launched initiatives like the SolarX Startup Challenge, STAR-C Initiative, and Green Hydrogen Innovation Centre. The seventh ISA Assembly 2024 emphasised international collaboration, introducing programs such as the Global Solar Facility to advance solar adoption, particularly in underserved regions.
Economic and Social Benefits
Renewable energy has catalysed India’s economic growth and job creation. The “Make in India” initiative has boosted domestic manufacturing in renewable energy equipment, expanding solar PV module production capacity from 2.3 GW to 67 GW in a decade. This fulfils domestic energy needs and strengthens India’s global clean energy market position.
Policies Powering India’s Clean Energy Transition
India’s commitment to renewable energy aligns with its updated Nationally Determined Contributions (NDCs) under the Paris Agreement. Key targets include a 45 per cent reduction in emissions intensity by 2030 and 50 per cent of cumulative electricity capacity from non-fossil sources. Fiscal measures, including subsidies and the PLI scheme, have driven investments in renewable energy infrastructure and technology.
India’s Fossil Fuel Subsidy Reform
India has made significant progress in reforming its fossil fuel subsidies over the past decade, driven by a structured approach to reduce fiscal pressure. The government’s “remove, target, and shift” strategy focused on phasing out subsidies on petrol and diesel, gradually increasing retail prices and taxes on petroleum products. This initiative reduced the fiscal subsidies in the oil and gas sector by a substantial 85%, from $25 billion in 2013 to just $3.5 billion by 2023. The freed-up fiscal space has been redirected towards fostering renewable energy development, electric vehicles, and improving critical electricity infrastructure. These reforms helped lower reliance on fossil fuel subsidies and promoted a transition to cleaner energy alternatives, reinforcing India’s commitment to environmental sustainability.
Taxation’s Role in Supporting Clean Energy
Taxation policies have been pivotal in supporting India’s clean energy transition. From 2010 to 2017, the government levied a cess on coal production and imports, with approximately 30% of the revenue directed to a national clean energy and environment fund. This fund supported various initiatives, such as the Green Energy Corridor and the National Solar Mission, which were crucial in reducing the cost of solar energy and financing renewable energy projects across the country. However, the introduction of the Goods and Services Tax (GST) in 2017 led to a shift in the allocation of coal cess revenues, as they were redirected to compensate states for revenue losses due to the new tax system. This shift underscores India’s complexities and challenges in aligning its fiscal policies with its clean energy ambitions.
Innovations Driving Sustainability
India’s innovative approach to fossil fuel subsidy reforms has redirected resources toward renewable energy. The “remove, target, and shift” strategy has reduced oil and gas subsidies by 85%, from $25 billion in 2013 to $3.5 billion in 2023. Taxation measures, such as a coal cess, have further financed clean energy initiatives, demonstrating India’s commitment to transitioning from fossil fuels to sustainable energy solutions.
Future Outlook
India’s renewable energy achievements are a testament to its commitment to combating climate change and achieving energy security. With over 200 GW of installed capacity, innovative government policies, and significant investments in green technologies, India is on track to meet its 2030 targets. States like Rajasthan, Gujarat, Tamil Nadu, and Karnataka continue to lead renewable energy deployment, setting an example for sustainable development.
India’s renewable energy journey highlights the potential for economic growth, job creation, and environmental sustainability. By leveraging innovative policies, international collaboration, and a robust renewable infrastructure, India is paving the way for a cleaner, greener future. Its achievements serve as a blueprint for other nations striving to balance development with climate action, showcasing how ambitious targets and proactive policies can lead to global leadership in clean energy.
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