India reaches 50% non-fossil fuel power capacity milestone, five years ahead of target

India has achieved a major climate milestone, reaching 50.1 per cent of its installed electricity capacity from non-fossil fuel sources as of June 30, 2025, surpassing its 2030 target set under the Paris Agreement five years ahead of schedule. The country’s installed capacity now stands at 485 gigawatts (GW), with over half of that, approximately 242.8 GW, coming from renewable sources, including solar, wind, and nuclear energy, as well as hydropower.

The Ministry of New and Renewable Energy (MNRE) credited the sharp increase in non-fossil fuel capacity to significant investments in solar and wind energy. India had committed to reaching 40 per cent non-fossil fuel capacity by 2030 during the Paris Agreement and later raised that target to 50 per cent in 2022. The current push has been especially driven by solar energy, which now makes up the largest share of India’s renewable energy capacity.

Renewables surge, but coal still dominates power generation

While non-fossil fuel sources now account for half of India’s electricity capacity, coal and other thermal power plants continue to dominate actual power generation. In 2024, India’s electricity production reached 2,030 terawatt-hours (TWh), with coal accounting for a record 1,517.9 TWh, despite renewables making up 240.5 TWh. This disparity reflects the intermittent nature of solar and wind power, which cannot consistently meet the country’s peak energy demand.

As renewable energy generation grows, India still relies heavily on thermal power for baseload support. For instance, even though non-fossil fuels account for 50 per cent of the installed capacity, thermal plants continue to generate over 70 per cent of the electricity, highlighting the ongoing need for stable, round-the-clock power. India's grid faces challenges in integrating renewable sources without adequate storage capacity, a gap that has been exacerbated by rapid growth in solar and wind power installations without corresponding investments in energy storage infrastructure.

Challenges and future steps

India’s rapid shift towards renewable energy has highlighted critical gaps in storage capacity, which is essential for stabilising the grid when renewable generation is low or during periods of high demand. As of the end of 2024, India’s storage capacity stood at just 4.75 GW from pumped storage and 110 MW from battery storage, far below the requirements needed to handle the growing share of renewables.

To address this, the Indian government has started taking proactive steps, including policy initiatives to encourage the co-location of storage systems with solar projects. The Central Electricity Authority (CEA) has also been working to ensure that future renewable energy projects include storage, and the government has expanded viability gap funding (VGF) to support the development of battery storage. However, the execution of these projects has been slow, with challenges such as high upfront costs, import duties, and supply chain constraints—particularly China’s control over the global battery market—hindering progress.

The government is also focusing on rooftop solar installations to decentralise energy generation and improve grid stability. The PM Surya Ghar: Muft Bijli Yojana has already added 3 GW of rooftop solar capacity, with plans to add 27 GW by March 2027. Additionally, hybrid tenders that combine solar, wind, and storage are gaining traction, as they offer a more diversified and reliable energy generation profile.

India’s renewable energy push has also brought several key companies into the spotlight. Waaree Energies, NTPC Green, Inox, and Adani Green Energy are among the top players benefiting from the surge in solar and wind installations. Waaree Energies, a major solar PV module manufacturer, has reported substantial growth in sales, while NTPC Green has made significant investments in both solar and wind projects, commissioning 1.6 GW of renewable energy projects in 2024 alone.

However, the renewable energy sector still faces hurdles, such as the lack of power purchase agreements (PPAs) for older projects and grid access issues due to underinvestment in transmission infrastructure. The government is working to resolve these challenges, but timely execution remains crucial to ensure that India stays on track to meet its 2030 renewable energy targets.