Between April and November, India added over 31 GW of renewable capacity and is on track to close the year with around 40-45 GW of new additions. Experts believe this pace can not only be sustained but also improve as project pipelines remain robust and investor interest stays strong.
Somesh Kumar, Partner and Power & Utilities Leader at EY India, said the sector is entering a phase where traditional bottlenecks such as land acquisition and financing are becoming less restrictive.
Capital availability has improved significantly, with both domestic and global investors actively funding renewable projects. Government-backed solar parks, hybrid projects and wasteland aggregation have also eased land-related challenges.
However, the next phase of growth will depend heavily on infrastructure readiness. Grid connectivity and transmission capacity are emerging as the biggest constraints. In many cases, generation capacity is awarded and built faster than transmission networks are commissioned, leading to evacuation challenges and delays in power integration.
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Intermittency is another key issue as
renewable energy increasingly accounts for a larger share of India’s power mix. As solar and wind generation rise, the need for flexible resources such as battery storage and pumped storage projects becomes critical to ensure grid stability.
Girishkumar Kadam, SVP and Group Head – Corporate Sector Ratings at ICRA, highlighted that intermittency-related curtailment is already visible in renewable-rich states such as Rajasthan and Gujarat. These challenges are largely due to mismatches between commissioned generation capacity and the availability of transmission evacuation infrastructure, including temporary grid access limitations.
Kadam noted that strengthening the transmission network at both inter-state and intra-state levels is essential, especially as renewable energy’s share in India’s power generation mix is expected to rise to 35–40% over the next four to five years.
Encouragingly, the outlook for energy storage is improving. Sharp declines in battery prices have led to strong participation in standalone battery storage tenders at competitive tariffs. While pumped storage projects will take longer due to longer gestation periods, both technologies are expected to play a central role in managing intermittency risks.
Despite renewable projects typically offering lower nominal returns compared to fossil fuel-based investments, capital continues to flow into the sector at record levels. This is largely because renewable assets provide stable, predictable and long-term cash flows backed by power purchase agreements, making them attractive to pension funds, sovereign wealth funds and long-term institutional investors.
At the same time, fossil fuel investments face rising regulatory risks, carbon pricing pressures and the possibility of asset stranding, prompting investors to reassess risk-return trade-offs.
Overall, experts believe India’s renewable energy story remains firmly on track. While transmission readiness and storage deployment will determine how smoothly the next phase unfolds, strong policy support, improving economics and sustained investor appetite are expected to keep the sector on a high-growth trajectory well into the next decade.
For full interview, watch accompanying video
