Andhra Pradesh is one of the leading states in India’s renewable energy sector, consistently progressing in its clean energy efforts and supporting the nation’s sustainability goals. Between March 2020 and March 2025, Andhra Pradesh’s installed renewables capacity increased from 8,481.43 MW to 10,504.48 MW (excluding hydro). The average annual growth rate during this period was 6 per cent. In comparison, India’s installed renewable capacity rose from 88,255.3 MW in March 2020 to 172,368.13 MW in March 2025 (excluding hydro). The average annual growth rate during these periods for the nation was 7 per cent. These figures highlight that Andhra Pradesh’s renewable energy expansion has been in line with the broader national trend.
Meanwhile, electricity demand in the state is expected to rise at a CAGR of 7.96 per cent between 2023-24 and 2031-32, as per the Central Electricity Authority (CEA), necessitating significant capacity additions. As of July 31, 2025, Andhra Pradesh’s total installed power capacity reached 27,586.93 MW, with thermal power contributing 13,907.67 MW, according to the CEA. Meanwhile, renewable energy accounted for 13,488.39 MW of the total capacity, as per the Ministry of New and Renewable Energy (MNRE). This means that renewable sources contributed approximately 50 per cent to the state’s overall power mix. The state is ranked sixth in terms of installed renewable capacity and accounts for 5.6 per cent of India’s total renewable energy capacity.
The state’s total installed renewable capacity of 13,488.39 MW comprises a diverse mix of 5,523.28 MW of solar, 4,397.78 MW of wind, 2,810.00 MW of large hydro, 163.31 MW of small hydro and 5,94.02 MW of biopower. The state’s biopower capacity is further segmented into 378.10 MW of biomass power/bagasse cogeneration, 113.57 MW of biomass cogeneration (non-bagasse), 53.16 MW of waste-to-energy (WtE) and 49.19 MW of off-grid WtE components. Additionally, solar capacity is segmented into 5,006.34 MW of ground-mounted solar, 428.6 MW of rooftop solar (including under the PM Surya Ghar: Muft Bijli Yojana) and 88.34 MW of off-grid/Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan (PM-KUSUM) components.
Renewable Watch takes a look at the trends and developments in Andhra Pradesh’s renewable energy sector…
Solar landscape
With an installed capacity of over 5.5 GW, the sector is currently the largest contributor to the state’s renewable energy mix. However, progress across different solar segments has been uneven, highlighting the need for a more balanced and coordinated development strategy.
A Lok Sabha response dated February 28, 2025, presents the development status of solar parks under the MNRE’s Development of Solar Parks and Ultra Mega Solar Power Projects scheme. The state has developed several key projects, such as the Ananthapuramu-I Solar Park and the Kurnool Solar Park, with an installed capacity of 1,400 MW and 1,000 MW respectively. The Kadapa Solar Park has a sanctioned capacity of 1,000 MW, with 387 MW already installed. The Ananthapuramu-II Solar Park has installed 400 MW out of the sanctioned capacity of 500 MW. Meanwhile, the Ramagiri Solar Park has a sanctioned capacity of 300 MW with no capacity installed yet.
In contrast, the uptake of rooftop solar under the PM Surya Ghar: Muft Bijli Yojana has remained sluggish. According to the scheme’s official website, Andhra Pradesh received 1,404,327 applications, but only 45,560 installations have been completed, translating into a conversion rate of just around 3 per cent. To boost uptake, the Andhra Pradesh Electricity Regulatory Commission (APERC), in April 2025, waived application fees and net metering charges for domestic consumers installing rooftop solar systems of up to 10 kW under the scheme.
Similarly, the state also lags in terms of implementation under the PM-KUSUM scheme. According to a response in the Lok Sabha dated July 31, 2024, Andhra Pradesh did not submit any demand or application under any of the PM-KUSUM components over the past five years. As a result, the state received no allocations under the scheme. As per the PM-KUSUM portal, there is no data for Andhra Pradesh under Components A, B or C. To address this lag, in August 2025, the state announced a target to fully solarise its agricultural sector within a year. In media reports, Chief Secretary of Andhra Pradesh K. Vijayanand stated that under the PM-KUSUM scheme, all 293,000 agricultural pump sets and 1,156 feeders across the state will be transitioned to solar power. To accelerate the process, 5,842 acres have been earmarked for solar projects, and discoms have been asked to fast-track power purchase agreements and land leases, while developers must complete projects within 12 months, with monthly reviews to monitor progress.
On a positive note, the state is emerging as a hub for solar manufacturing. Earlier in March 2025, Premier Energies announced plans to relocate a 4 GW solar photovoltaic (PV) TOPCon cell line from Telangana to Andhra Pradesh. Additionally, in May 2025, Jupiter Renewables announced plans to invest Rs 27 billion to set up a solar cell manufacturing plant in the state. This push towards manufacturing is supported by the Integrated Clean Energy Policy (ICE), 2024, which offers incentives like capital subsidies, state GST reimbursement and stamp duty exemptions, thereby boosting investor confidence and positioning Andhra Pradesh as a clean energy manufacturing hub.
Wind momentum
Beyond its solar advancements, Andhra Pradesh has ideal geographical conditions and favourable wind patterns for wind power development. Due to this, the state is promoting large-scale onshore wind projects and hybrid (wind-solar) installations. In May 2025, ReNew Energy announced plans to invest Rs 220 billion to set up a hybrid renewable energy project in Andhra Pradesh, which will have combined 2.8 GW of wind and solar generation capacity and 2 GWh of battery storage. Further, in March 2025, Tata Power Renewable Energy Limited and the Andhra Pradesh government signed an MoU to develop up to 7,000 MW of renewable energy capacity in the state, including wind, hybrid and solar projects. The state’s extensive coastline also presents a promising opportunity for offshore wind development. However, this potential remains untapped.
Focus on energy storage
According to the CEA, Andhra Pradesh holds the highest pumped storage project (PSP) potential in southern India, with an estimated capacity of 30,350 MW, representing around 45 per cent of the southern region’s total PSP potential. This includes four on-river and 21 off-river projects with 4,750 MW and 25,600 MW potential respectively. Moreover, Andhra Pradesh’s 2024 ICE Policy aims to establish up to 22,000 MW of pumped hydro storage capacity by 2030.
Currently, the state has only one operational PSP – a 1,200 MW project developed by Greenko AP01 IREP Private Limited. According to the CEA, several large projects with capacities exceeding 25 MW are under construction in Andhra Pradesh. These include the Upper Sileru PSP (1,350 MW), Gandikota PSP (1,000 MW), Chitravathi PSP (500 MW) and Pinnapuram PSP (480 MW). Meanwhile, in July 2025, the Andhra Pradesh government cancelled two PSPs of 1,200 MW and 1,000 MW capacities at Kurukutti and Karrivalasa, respectively, because of boundary issues with Odisha.
In parallel, Andhra Pradesh is also actively advancing battery energy storage systems (BESSs) to boost grid flexibility and support renewable integration. In June 2025, APERC released the draft regulations for the Planning, Procurement, Deployment and Utilisation of BESS, which align with the state’s ICE Policy, 2024. The policy has a target of 25 GWh of BESS capacity to integrate over 160 GW of renewable energy.
Several BESS initiatives are now under way in Andhra Pradesh. In August 2025, the Solar Energy Corporation of India (SECI) issued a tender to select a supplier for a 600 MW/1,200 MWh standalone grid-connected BESS to be located at Kolimigundla, Nandyal district. In July 2025, ACME Solar Holdings announced that its wholly owned subsidiaries had signed BESS purchase agreements with NHPC Limited for the development of two standalone BESS projects with a total contracted capacity of 275 MW/550 MWh. Further, in June 2025, NHPC Limited announced the auction results for its 500 MW/1,000 MWh intra-state standalone BESS tender (Tranche II) in the state. Patel Infrastructure was awarded 225 MW/450 MWh at a tariff of Rs 208,000 per MW per month for the Jammalamadugu substation, while ACME Solar secured 225 MW/450 MWh at Rs 222,000 per MW per month for the Ghani substation, and an additional 50 MW/100 MWh at Rs 210,000 per MW per month for the Kuppam substation. Together, these PSP and BESS developments highlight Andhra Pradesh’s determination to strengthen its energy storage portfolio, ensuring greater renewable integration and long-term energy security.
Green hydrogen uptake
Andhra Pradesh’s green hydrogen sector is gaining momentum, backed by robust renewable capacity and the ICE Policy, 2024. The policy offers incentives for both hydrogen production and electrolyser manufacturing, such as capital subsidies, state GST reimbursement, concessional land and reduced utility charges, making projects more cost-effective and investor-friendly. A major step was taken in July 2025, when the Andhra Pradesh government unveiled the Green Hydrogen Valley Declaration 2025, marking a significant milestone in its clean energy journey. The declaration sets ambitious targets, including establishing 5 GW of electrolyser manufacturing capacity and producing 1.5 million metric tonnes of green hydrogen annually by 2029. Additionally, it aims to reduce hydrogen costs from Rs 460 per kg to Rs 160 per kg to ensure global competitiveness.
Furthermore, several initiatives position the state as a front runner in the green hydrogen space. Earlier in January 2025, Prime Minister Narendra Modi laid the foundation stone for NTPC Green Energy Limited’s green hydrogen hub project at Pudimadaka. The same month, YamnaCo Limited signed an MoU with the New and Renewable Energy Development Corporation of Andhra Pradesh to develop a phased grid-connected green ammonia project with a planned capacity of up to 1 million tonnes per annum. Located near Krishnapatnam port, the project involves an investment of about Rs 160 billion. In March 2025, Hero Future Energies inaugurated a Rs 10 billion green hydrogen plant at Rockman Industries in Tirupati. The facility blends green hydrogen with piped natural gas and liquefied natural gas for industrial applications.
Recently, SECI conducted 13 green ammonia auctions under the Strategic Interventions for Green Hydrogen Transition Programme (Mode 2A, Tranche I), with a cumulative procurement capacity of 724,000 tonnes per annum (tpa). Two of these auctions focused on Andhra Pradesh. Jakson Green emerged as the winner of SECI’s sixth green ammonia auction to supply 85,000 tpa of green ammonia to Coromandel International Limited in Kakinada, at a tariff of Rs 50.75 per kg. Additionally, ACME Cleantech Solutions Private Limited won the seventh green ammonia auction of the series, securing the supply of 50,000 tpa of green ammonia to Coromandel International Limited in Visakhapatnam, for a period of 10 years, at a tariff of Rs 51.89 per kg.
Strengthening transmission
Along with generation, it is equally vital to ensure the efficient transmission of renewable energy to end-consumers, for which Andhra Pradesh is taking several strategic steps. The Green Energy Corridor Phase I (GEC-I) programme focused on eight renewable-rich states, namely, Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu. However, the phase experienced delays in Andhra Pradesh, Gujarat and Maharashtra due to right-of-way and land acquisition issues. According to the Economic Survey 2024-25, nearly 9,136 ckt km of transmission lines and 21,413 MVA of substation capacity have been commissioned under GEC-I.
The initiative is now entering its third phase. The Ministry of Power has urged states to submit proposals for intra-state transmission systems under GEC-III. In line with this, Andhra Pradesh Transmission Corporation submitted its proposals to the CEA in August 2025. The proposal aims to integrate 11 GW of solar power and 7,373 MW of PSPs into the state’s grid at an estimated investment of Rs 280.33 billion. Under this phase, the state plans to add 8,862 ckt km of transmission lines and 9,500 MVA of substation capacity.
The way forward
Andhra Pradesh has emerged as one of India’s most promising renewable energy hubs, with renewables accounting for nearly 50 per cent of its total installed power capacity. The state has laid out ambitious targets, supported by robust policy frameworks such as the ICE Policy, 2024, which aims to add 78,500 MWp of solar and 35,000 MW of wind capacity. These commitments underscore Andhra Pradesh’s intent to play a leading role in India’s clean energy transition.
While the state has made notable progress in scaling up its renewable energy footprint, several critical challenges need urgent attention. A key issue has been the delay in initiating work by developers. In a bid to fast-track projects and enforce accountability, the state’s chief minister in August 2025 initiated a review of renewable energy projects worth Rs 4,000 billion. This resulted in the cancellation of non-compliant projects and the reclamation of stalled capacity.
Another challenge is the geographic concentration of renewable energy capacity, particularly in the Rayalaseema region. This has resulted in grid congestion and transmission constraints, limiting the efficient evacuation of power. To address this, the state has undertaken significant initiatives, including the development of green energy corridors, the identification of renewable energy zones and the upgrading of transmission infrastructure. These efforts are expected to ease grid stress, promote balanced regional deployment and enhance system resilience.
Despite having a fairly diverse renewable energy portfolio, Andhra Pradesh faces imbalances in resource development. Between March 2020 and July 2025, biomass-based installed capacity grew at a modest rate of 2 per cent annually, and the installed capacity of small hydro recorded negligible growth at just 0.15 per cent. These figures point to the need for stronger policy and financial support for underperforming segments to ensure a more balanced energy mix.
The state’s resource potential remains significantly underutilised. As per MNRE estimates, Andhra Pradesh has a solar potential of 38,440 MW and a wind potential of 123,336 MW. However, current installed capacities represent just 14.4 per cent and 3.6 per cent of this potential respectively.
Encouragingly, according to the CEA’s quarterly report on under-construction renewable energy projects, released in June 2025, Andhra Pradesh has a pipeline of approximately 81,699 MW comprising solar and wind-solar hybrid projects. These projects, once operationalised, could significantly advance the state’s clean energy targets.
With clear policy direction, strong project pipeline and significant resource potential, Andhra Pradesh is well positioned to consolidate its leadership in India’s renewable energy space. Together, these efforts position the state as a valuable contributor to the clean energy sector and a critical enabler of India’s energy transition.
By Nidhi Dua
