Green Power Market – Energizing India’s Clean and Sustainable Future

Green power, derived from renewable sources like solar, wind, hydro, and biomass, is at the heart of India’s energy transition. With ambitious national targets and robust policy support, the green power market is witnessing unprecedented growth, attracting record investments and driving innovation across the energy landscape. As of June 2025, India’s installed non-fossil fuel power capacity has reached 235.7 GW, accounting for nearly half of the country’s total power generation capacity. The market is set to expand rapidly, with investments in renewables reaching over ₹82,000 crore in just the first quarter of 2025.

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Why Green Power Market Matters

• Climate Action and Sustainability: Green power is essential for reducing carbon emissions and combating climate change, supporting India’s commitment to achieve 500 GW of non-fossil capacity by 2030 and net-zero emissions by 2070.

• Energy Security: Diversifying the energy mix with renewables reduces dependence on imported fossil fuels, enhancing national energy security and price stability.

• Economic Growth and Jobs: The sector is generating new employment opportunities and attracting both domestic and foreign investments, fueling economic development.

• Universal Access: Green power projects are electrifying remote and rural areas, improving quality of life and supporting inclusive growth.

Market Drivers

• Government Policies and Incentives: Proactive measures, such as annual tenders for solar, wind, and hybrid projects, subsidies, and tax benefits, are accelerating capacity additions and domestic manufacturing.

• Declining Technology Costs: Advances in solar panels, wind turbines, and battery storage are making green power more affordable and competitive.

• Rising Power Demand: Rapid urbanization, industrialization, and the push for electric vehicles are increasing electricity consumption, driving demand for clean energy solutions.

• Corporate Sustainability Commitments: Businesses are increasingly investing in renewable energy to meet ESG goals and regulatory requirements.

• Global Investment: India attracted over ₹82,000 crore in renewable energy investments in Q1 2025 alone, reflecting strong investor confidence and market momentum.

Challenges

• High Initial Investment: Despite falling technology costs, upfront capital requirements for renewable projects remain significant, especially for storage and grid upgrades.

• Grid Integration and Stability: Managing the variability of solar and wind power requires robust grid infrastructure and advanced energy storage solutions.

• Regulatory and Policy Uncertainty: Inconsistent policies, complex permitting, and changing incentives can deter investment and slow project implementation.

• Transmission and Distribution Constraints: Inadequate infrastructure can lead to grid congestion and curtailment of green electricity, affecting market efficiency.

• Market Mechanism Issues: Challenges in renewable energy trading, such as low liquidity in REC markets and payment delays in PPAs, impact market growth.

Market Outcome

• Strong Growth Trajectory: India’s green power market is expected to nearly double its renewable capacity by 2030, with total investments projected to exceed ₹10 lakh crore over the next decade.

• Record Capacity Additions: As of June 2025, renewables account for 226.9 GW of installed capacity, with solar (110.9 GW) and wind (51.3 GW) leading the way.

• Competitive and Innovative Landscape: Both public and private players are investing in R&D, digitalization, and new business models, making the market highly dynamic.

• Asia-Pacific Leadership: India is emerging as a global leader in green power, ranking fourth in both wind and solar capacity and setting benchmarks for other developing economies.