Economic Survey Calls for Pragmatic Reforms to Sustain India’s Renewable Energy Momentum

India must undertake pragmatic policy and financial reforms to sustain its rapid renewable energy expansion, the Economic Survey 2025–26 said, highlighting key challenges including high capital costs, land acquisition delays, and grid availability constraints.

The survey emphasized that addressing these bottlenecks through innovative financing mechanisms, optimized project execution, and improved regulatory instruments will be critical to maintaining the country’s clean energy growth trajectory.

India’s energy landscape is undergoing a structural transformation, with the country ranking third globally in overall renewable energy capacity and installed solar capacity, and fourth in installed wind capacity. The survey noted that India has already surpassed its target of achieving 50% of installed power capacity from non-fossil fuel sources, reaching 51.93% as of December 2025.

During the ongoing financial year 2025–26 (up to December 31, 2025), India added 38.61 GW of renewable energy capacity, including 30.16 GW of solar, 4.47 GW of wind, 3.24 GW of hydro, and 0.03 GW of bio-power. The country is targeting 500 GW of non-fossil fuel-based capacity in the coming years.

The survey also highlighted the growing importance of Battery Energy Storage Systems (BESS) and Pumped Storage Hydropower (PSP) to manage renewable energy variability, enhance grid stability, and support peak-load management.

However, it flagged concerns around material intensity and rising input costs, noting that solar panel manufacturing requires significant quantities of silver, polysilicon, and aluminium. It warned that gold and silver prices may continue to rise due to global economic uncertainties and safe-haven investment demand, potentially impacting solar project costs.

The Economic Survey underscored the need for integrated policy planning, storage deployment, and infrastructure upgrades to ensure a clean, secure, and resilient power system as India advances toward its net-zero ambitions.