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India overtook the United States (US) to become the largest market for new solar capacity additions outside China in 2025, driven by strong growth in rooftop solar. This would have been unthinkable before PMSuryaghar came into the picture, and perhaps, credit needs to be given where due to the government for ensuring that the scheme has largely delivered on key objectives. Almost 6 million households have availed of the scheme so far.  
According to a latest BloombergNEF (BNEF) report, subsidies and support for decentralised agrivoltaic projects (Mostly PMKUSUM) have contributed to this growth, while the co-location of energy storage systems (ESS) with solar projects can improve project economics by shifting electricity supply to evening peak-demand hours.
Rooftop solar emerged as India’s fastest-growing solar segment, supported by capital expenditure subsidies. Government assistance has also extended to the relatively small segment of decentralised agrivoltaic (agro-PV) projects. Meanwhile, co-locating energy storage with solar projects can improve project economics by shifting electricity generation to evening peak-demand hours.
India added 51 GW (direct current, DC) of solar capacity in 2025, surpassing its previous record set in 2024 by 55%. The country has increased its annual solar additions every year since 2023. BNEF expects India to add another 52 GW (DC) in 2026, allowing it to retain its position as the world’s second-largest solar market this year.
India also recorded a major milestone in wind power deployment, overtaking the US and Germany to become the world’s second-largest wind market in 2025, according to BNEF.
Record additions of 6.3 GW lifted India from fifth place in 2024. The 2025 additions were nearly double the previous year’s total and approximately 50% higher than the previous record set in 2017. The surge included projects that had previously been delayed by land acquisition and grid connectivity challenges.
The acceleration in wind deployment is significant for India’s increasingly solar-heavy power system. Rapid solar capacity additions have pushed daytime electricity prices close to zero on several occasions. Wind power can help diversify renewable generation beyond daylight hours, with wind projects generally performing particularly well during the windier monsoon season.

BNEF projects that India will become the world’s third-largest market for energy storage projects by 2030, excluding pumped hydro storage. Cumulative energy storage capacity is expected to reach 45 GW/138 gigawatt-hours (GWh) by the end of the decade.
Standalone storage auctions have gained momentum with support from federal government subsidies. Under the government’s latest policy revision, viability gap funding (VGF)—a subsidy that covers part of a project’s upfront cost—provides assistance of ₹18 lakh ($18,700) per megawatt-hour. This covers approximately 15%–20% of project capital expenditure.

Government-organised, multi-technology renewable energy auctions increasingly require developers to supply firm, or assured, electricity. This has encouraged power producers to combine renewable energy generation with storage when bidding for contracts.
India has the world’s lowest levelised cost of electricity (LCOE) for utility-scale solar projects, according to BNEF. A significant share of these projects is located in Rajasthan and Gujarat, where clear, sunny weather supports solar generation for much of the year.
The government has also developed numerous solar parks in these states, providing developers with large tracts of flat, contiguous land for project development.

Standalone solar and wind have been India’s cheapest sources of new bulk power generation since 2018, based on BNEF’s LCOE estimates.
In the second half of 2025, the LCOE of Indian solar and wind projects paired with four-hour battery energy storage systems (BESS) fell below that of coal-fired power plants for the first time under BNEF’s mid-case scenario.
Declining battery prices have been a key factor behind this shift. BNEF forecasts that turnkey costs for a four-hour energy storage system could fall to $48 per kilowatt-hour (kWh) in China by 2030, from $62/kWh in 2025. In Europe, costs are projected to decline to $125/kWh from $172/kWh over the same period.
These global declines in battery costs are likely to exert downward pressure on storage costs in India as well. The LCOE of renewable energy systems paired with storage could fall further as developers gain experience from India’s first projects and benefit from improved project execution.
Corporations operating in India signed approximately 2.3 GW of clean power purchase agreements (PPAs) in 2026 through September, making India the largest market in the Asia-Pacific region for such deals during the calendar year.
Meanwhile, the Central Electricity Regulatory Commission (CERC) is tightening deviation settlement mechanism (DSM) rules for renewable energy generators to support grid stability as the share of intermittent generation increases.
In 2025, wind and solar accounted for 16% of India’s electricity generation. Their combined share could rise to 41% by 2035 under BNEF’s economics-led scenario.
Power grids are another major investment area as India expands and upgrades its electricity network to accommodate rising power demand and electrification.
Investment in new connections and grid assets, alongside the reinforcement of the existing network, is expected to average $53 billion annually through 2050.
Renewable energy and storage will require a further $1.5 trillion in investment over the same period. Solar and wind are expected to account for approximately $500 billion each.
Renewable energy assets are projected to attract an average of $40 billion annually through 2050, while energy storage is expected to draw a further $19 billion a year.
Government subsidies have also supported the expansion of standalone energy storage auctions in India. Under the viability gap funding mechanism, eligible projects receive assistance of approximately ₹18 lakh ($18,700) per MWh to cover part of their upfront costs.
The support is designed to cover roughly 15%–20% of project capital expenditure, improving project viability and encouraging investment in standalone storage capacity.
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