By Khushboo Goyal
The year 2025 has been an exciting one for the Indian renewable energy sector, with the installed renewable energy capacity crossing 200 GW as of October 2025. Of this, 27 GW has been added in the current financial year – in only 10 months’ time. Solar continues to lead in terms of annual capacity deployments, not just in the renewables space but also the overall power sector, overtaking thermal and other segments by a huge margin with 24 GW of capacity additions.
This has been a year marked by various encouraging policy interventions as well, including greater budgetary allocation for the Ministry of New and Renewable Energy as compared to the Ministry of Power, as well as a reduction in GST rates to 5 per cent for key renewable energy equipment.
On the project development side, standalone solar and wind auctions have given way to more complex hybrid and storage-integrated project tenders. There has been a noticeable increase in the deployment of distributed energy systems, including residential rooftop projects as well as open access and group-captive arrangements for corporates. The renewable energy sector has seen a definite movement towards resource diversification, development of decentralised generation, greater interconnection of different systems and the strengthening of local supply chains.
In this article, Renewable Watch presents the top renewable energy trends of 2025 that are expected to shape the industry’s growth in the upcoming years…
Age of storage
Energy storage has emerged as a critical link in the power sector landscape. Be it generation, transmission or distribution, energy storage plays a role everywhere. On the generation side, it helps address the intermittency of solar and wind, providing a firm energy profile, which is becoming more important considering the increasing volumes of infirm renewables in the grid. From a transmission and distribution perspective, it helps utilities manage their power demand and supply more efficiently, ensure grid stability and avoid costly expansion or upgrades. Thus, the government has undertaken several policy initiatives to attract private sector participation in both the battery energy storage system (BESS) and pumped storage project (PSP) sectors, including the extension of waivers for interstate transmission system (ISTS) charges, viability gap funding for BESS, budgetary support for PSPs, reduction in approval timelines for PSPs, and guidelines to promote BESS and PSP deployment.
With a maturing renewable energy sector, utilities now want firm, clean power round the clock. Thus, there have been a slew of auctions not just in firm and despatchable renewable energy (FDRE) but also standalone BESS tenders. In fact, according to Renewable Watch Research, at least 15 auctions have been conducted for standalone BESSs by various central and state agencies in 2025 alone. Even commercial and industrial consumers are now demanding FDRE and BESS-integrated renewables to meet their green power requirements. The BESS market has also expanded significantly, witnessing the entry of many new players and equal participation by existing large IPPs and engineering, procurement and construction companies. Meanwhile, there has been a noticeable decline in tenders for standalone solar and wind power.
As the demand for energy storage grows, the PSP space has also witnessed renewed interest from policymakers, utilities and developers. It would not be incorrect to say that PSPs have, in fact, given a new lease of life to the struggling hydropower sector. As per the Central Electricity Authority, 10 PSPs of 6,925 MW have been commissioned as of October 2025, including the Pinnapuram PSP (1,680 MW) and the Tehri PSP (500 MW). Ten PSPs of 11,870 MW are under construction, and another five PSPs of 6,580 MW have been concurred to be taken up for construction – indicating heightened activity in an otherwise slow-moving sector.
In the coming years, there is expected to be a more rapid build-out of energy storage projects, provided there is policy certainty, no disruption in equipment supplies, and that power purchase agreements are signed at the earliest, and developers stay committed to these projects.
Green hydrogen gains
Green hydrogen has emerged as a key enabler in decarbonising hard-to-abate sectors such as steel, cement, fertilisers, chemicals and long-haul transport. India’s rich experience in generating renewable energy at highly competitive prices is a significant advantage in this regard.
The government, on its part, has taken many encouraging steps to accelerate the deployment of green hydrogen projects. In fact, an entire mission has been dedicated to it with a clear roadmap. In addition, ISTS charges have been waived; incentives have been announced for green hydrogen, ammonia production and electrolyser manufacturing; a research and development roadmap and green hydrogen standards have been announced; and adequate support is being provided to pilot projects.
While the National Green Hydrogen Mission has been in place for some years, it is only in the past few months that there have been promising signs of the gap between the cost of green and grey hydrogen narrowing. India’s green hydrogen market is finally taking off now, as is evident from the slew of recent successful auctions. In March 2025, the Solar Energy Corporation of India (SECI) awarded a total of 450,000 metric tonnes to nine players for setting up green hydrogen production facilities. Then, in August and September 2025, SECI conducted auctions to select developers for supplying green ammonia to 13 fertiliser units across the country, which resulted in tariff discoveries of Rs 49.75-Rs 64.74 per kg. These tariffs are among the lowest ever seen globally for the green ammonia sector, setting a new benchmark and placing India at the front of the line in the green hydrogen race. In addition, oil majors such as Indian Oil Corporation and Hindustan Petroleum Corporation have conducted successful bids, which also resulted in competitive price discoveries. Further, agencies like NTPC Limited and SJVN Limited also issued tenders in this space, indicating growing interest from various major stakeholder groups in the energy space.
There have been grand commitments from both the public and private sectors to produce green hydrogen and its derivatives to cater to not just the domestic market but also export to major demand centres across Europe, Singapore, Japan and other economies.
To continue this growth momentum, more such auctions are required across different sectors to ensure that there is significant domestic demand. Efforts should be made to develop storage and transport infrastructure for green hydrogen, along with adequate standards. Finally, clear regulatory provisions for offtake and a global consensus on green hydrogen definition are of utmost importance to ensure that developers can find green hydrogen buyers in India and abroad.
“Make in India” makes progress
The Indian solar PV industry has made remarkable progress in ramping up its domestic manufacturing capability. The country’s solar PV module manufacturing capacity has grown from less than 3 GW in 2014 to over 100 GW as of today. This has been possible due to government initiatives to reduce imports in the form of trade and non-trade barriers, and equal participation from the private sector – not just the traditional equipment manufacturers but also developers that want to secure their supply chains.
This growth has also partly been spurred by the supply chain disruptions witnessed during the Covid-19 period, when the entire solar project deployment activity came to a standstill due to the overdependence on imports from a particular country. Insufficient domestic production also meant that the Indian solar industry was vulnerable to any global disruption in supply chains. Thus, over the years, conscious efforts have been made to reduce this dependence on imports. Significant investments have been made not just in module manufacturing but also in cell production capability, which has grown to over 25 GW from virtually zero a few years ago. Significant investments have also been announced for the production of wafers and polycrystalline.
To maintain this momentum, what is required is policy certainty and the phased implementation of new tariff-related policy measures. For instance, the policy flip-flop during the implementation of the Approved List of Models and Manufacturers (ALMM) created major uncertainty in the market. In addition, the imposition of import duties on solar cells and modules created flux among stakeholders. Such measures should be introduced in a graded manner so as to not impact development activities in the short term. That being said, the recent interventions regarding ALMM II for cells and ALMM III for wafers are steps taken in the right direction to help expand the overall supply chain.
On the battery side, the picture is not as bright as in the solar PV space, and India will continue to import significant volumes of lithium-ion cells in the near future to meet the domestic demand for batteries. To address this, greater production-linked incentive allocations are urgently needed to attract investments in this space. There is also a significant need to develop indigenous alternative battery technologies and reduce costly raw material imports.
The story is somewhat better on the wind side, which is already 70-80 per cent localised, and on the green hydrogen side, where massive plans have been announced to manufacture electrolysers in India. A possible issue that could arise in these two sectors is that of oversupply. Wind power has recently started seeing renewed interest, owing to FDRE and hybrid projects, but even then, capacity installations are quite small compared to solar. In the green hydrogen space, demand – both domestic and export-oriented – needs to scale up to be able to absorb the electrolysers that are going to be manufactured in the country. On the positive side, the domestic manufacturing industry for wind power and green hydrogen is much better prepared for planned demand scale-up, unlike solar and battery, where equipment supply gaps remain significant.
Going forward, the country must secure the supply chains of critical raw materials, minerals and metals like lithium, copper, cobalt, nickel and rare earth elements. This will ensure that disruptions in their availability do not impede the growth of the clean energy sector. Further, the Indian industry should focus on manufacturing quality equipment that can compete on the global stage. Some Indian manufacturers are already exporting equipment to attractive markets like the US and Europe. With the changing geopolitics and the adoption of the “China+1” strategy by various countries, India is ideally placed to be a key export hub in the coming years.
Towards intelligent and automated systems
The renewable energy sector is witnessing a digital revolution. With the growing scale and size of renewable energy projects and expanding developer portfolios, there has been a significant increase in the adoption of automation and digital tools. Drones are being used for inspection, and robots are being used for routine maintenance tasks such as module cleaning and vegetation management in solar projects and monitoring in wind turbines. As with any other sector today, artificial intelligence (AI) is assuming a greater role in day-to-day activities in the renewable energy sector, be it the development of bidding strategies, project design, operations and maintenance, or generation forecasting and scheduling.
These tools and technologies not only help in reducing manpower costs, but also serve a greater purpose – of improving efficiency in an increasingly complicated renewable energy landscape. The role of AI and digitalisation will become even more prominent as we move towards greater hybridisation and more complex FDRE mechanisms, where multiple renewable energy sources must be integrated with the grid. Further, AI is now enabling predictive maintenance to maximise project returns, implement course corrections and identify faults before they occur to reduce downtime and increase asset life, and create digital twins to improve performance assessments and develop models to continuously innovate and improve future projects.
Another area where AI is expected to play a major role is in ensuring grid stability, especially as the volume of renewable energy in the grid increases. There is also a growing uptake of rooftop solar systems and electric vehicles on the consumer side, which is further complicating the already burdened grids. Digitalisation thus becomes important for transcos and discoms to address issues of network congestion and manage their loads. Digital tools will not only help grid operators to better balance the grid but also help developers to improve accuracy in generation forecasting and scheduling and reduce their deviation settlement mechanism penalties. In the long run, this will help developers reduce their generation curtailment, which continues to be a key issue in some renewable-rich states. Thus, as the entire power sector becomes more distributed and connected, digitalisation will serve as a key enabler, ensuring that individual parts and the system as a whole operate efficiently without any hiccups.
A wide variety of service providers have entered this rapidly growing digitalisation space, offering solutions ranging from predictive analytics tools to chatbots for maintaining documentation to digital twin applications and even AI-integrated robots for intelligent module cleaning. Indian developers have been quite enthusiastic about adopting these technologies, especially as managing the growing complexity of projects in a price-sensitive market would not be possible without the implementation of such tools.
While challenges remain in areas such as cybersecurity, interoperability of data from different manufacturers, and data transparency, significant efforts are being made by industry and academia to address these gaps. However, a word of caution: there is an urgent need for skilled manpower that is capable of leveraging AI and digital tools to obtain actionable insights. Additionally, the government must develop adequate protocols and regulatory frameworks to ensure transparent and ethical use of AI without impacting the employment potential of the growing workforce.
Parting thoughts
In order to sustain growth and achieve the country’s renewable energy goals, it is important to address the legacy issues plaguing the sector. Transmission constraints, complicated land acquisition procedures, timely approval of tariffs and signing of PPAs, and policy certainty are four critical challenges that must be addressed urgently to ensure that the sector continues to grow in a sustainable manner, while also catering to the interests of all stakeholder groups. Net, net, there is a need for continuous monitoring, collaboration between different parties and course correction to build a truly future-ready renewable energy sector.
