- India's renewable energy capacity grew 20% in FY26, coal output fell 4.3%
- Record 57.5 GW power capacity added in FY26, 95% from renewables
- 151 GW renewable projects under construction, including 90 GW solar
Renewable Energy: India has hit a significant clean-energy milestone at a time when Prime Minister Narendra Modi has been urging austerity and conservation of fuel.
The latest FY26 Market Handbook from the Council on Energy, Environment and Water's Green Finance Centre shows renewable generation in India rising 20 per cent year-on-year, while coal and lignite output falling 4.3 per cent.
India added a record 57.5 GW of net power capacity in FY26, up from 33.2 GW in FY25. Renewables, including large hydro, accounted for 54.6 GW-about 95 per cent of the year's additions-taking total installed capacity to 533 GW, with renewables forming nearly 52 per cent of the mix.
As of March 2026, around 151 GW of renewable capacity is under construction: roughly 90 GW solar, 29 GW wind, 19 GW hybrid and 13 GW large hydro. The report also flags FY26 as a turning point for storage, with 37 tenders issued.
"India's energy transition continues to gather pace... the sector is also at an important crossroads," said Gagan Sidhu, Director, CEEW-GFC, noting a 26 per cent drop in FDI in the first three quarters of FY26 compared with a year earlier.
Sharing his insights on capacity addition amid the debate over PM's call to cut energy dependency, Nirmal K Minda, President Assocham, said, "India's breakthrough in the Renewable energy installed capacity has placed the country in the league of energy efficient economies. This strength paves way for India's efforts to become self-reliant in energy scenario and attain net zero by 2070. Going ahead, continued investment in the Renewable energy resources will strengthen India's journey towards Viksit Bharat and its strong participation in the Global Energy Reserves."
The report points to improvements in distribution finances as well. Legacy dues owed by discoms fell to Rs 4,109 crore in February 2026 from Rs 49,451 crore in January 2024, helped by late-payment surcharge rules. About 65 million smart meters have been installed. On the financing side, sovereign green bonds worth Rs 20,000 crore were issued in four 30-year tranches at a 6.98 per cent coupon.
According to International Renewable Energy Agency data, India ranks among the top countries globally in installed renewable capacity, alongside China and the United States. Large hydro bases keep Brazil and Germany high on the list as well.
The economics are central to the policy debate. Every additional unit generated from solar or wind reduces the need to burn imported coal or gas. If even 10 GW of fossil-fuel generation is replaced with renewables operating at typical annual utilisation, modest per-unit savings can translate into thousands of crores in avoided fuel costs each year, besides lowering exposure to global price swings.
South Asia is seeing parallel shifts. Pakistan has expanded solar adoption rapidly in the past two years, helping reduce reliance on imported LNG during periods of global volatility. Recent reports show a surge in solar adoption, with solar accounting for 25 per cent of utility electricity in early 2025 -- placing Pakistan among fewer than 20 nations worldwide where solar is a top grid source.
How Renewables Cut India's Import Bill
At its core, increasing renewable capacity cuts reliance on imported fossil fuels (like crude oil, LNG, diesel) -- something that directly aligns with PM Modi's call to cut imports and save forex reserves. The elevated price of crude oil amid volatile global markets heightens India's energy insecurity.
Here's how the savings stack up:
Reduced Fuel Imports: Less need for imported coal, oil, or gas for power generation => direct import bill reduction.
Lower Generation Costs: Solar and wind have reached lower tariffs than new coal/gas plants -- solar tariffs have dropped drastically over the decade.
Energy Security & Stability: Broader solar/wind grids reduce price exposure to global supply shocks (e.g., Middle East disruptions).
Savings Example: If India replaces even 10 GW of fossil-fuel generation each year with renewables at a generation cost saving of just Rs 1/unit over 7,000 hours of annual production, savings can exceed Rs 7,000 crore/year ($860m) in fuel costs -- and that's before factoring grid/storage benefits. Moreover, distributed solar and energy storage cuts peak demand, reducing need for diesel generators and costly imported electricity solutions.
Therefore, for India, the numbers suggest the clean-energy build-out is not only a climate objective but also an economic lever -- more so in the current geopolitical climate.
