India's Renewable Energy Capacity Set for Major Expansion to 315 GW by 2028
India's renewable energy sector is poised for significant growth, with the combined installed capacity of solar and wind power projected to increase substantially over the coming years. According to a recent analysis by Crisil, the capacity is expected to rise to 310–315 gigawatts (GW) by March 2028, up from approximately 206 GW as of March 2026.
Transforming the Power Mix with Renewables
This expansion will dramatically alter India's power generation landscape. Renewables are forecasted to account for 45%–47% of the total power mix by 2028, a notable increase from about 20% at the start of the decade, 24% in FY2022, and roughly 38% in FY2026. The sector continues to benefit from robust government support, with over 100 GW of capacity likely to be added across the current and next fiscal years.
"Renewable energy is projected to account for Rs 6 lakh crore – Rs 7 lakh crore out of the total Rs 23 lakh crore – Rs 24 lakh crore investment in key infrastructure segments in FY27–FY28, translating to roughly 26%–29% of the overall spend," said Krishnan Sitaraman, chief ratings officer at Crisil.
Key Drivers of Growth
Two primary factors are expected to fuel this capacity addition. First, a strong executable pipeline of over 95 GW of utility-scale projects with remunerative tariffs will constitute about 60% of the capacity addition over the next two years. Second, supportive policies and incentives will boost the commercial and industrial (C&I) segment as well as rooftop installations, contributing the remaining 40%, as noted by Manish Gupta, deputy chief rating officer at Crisil.
Growth is anticipated to remain robust across all segments. Utility projects are expected to achieve a compound annual growth rate (CAGR) of about 22%, while the C&I segment may grow even faster at around 28%. India is also advancing toward greater self-reliance in renewable manufacturing, with domestic supply chains strengthening across modules, batteries, and ancillary equipment.
Ample liquidity and sustained investor interest are further bolstering capacity addition, Gupta pointed out.
Persistent Challenges and Risks
Despite the optimistic outlook, challenges persist in the renewable energy sector. Delays in power purchase agreement (PPA) closures and transmission readiness remain key risks. Approximately half of the capacity awarded over the past three fiscal years has yet to secure PPAs, exposing projects to offtake risk.
Compared with thermal projects, which achieved PPA closure within about a month in 2025, renewable projects—particularly hybrid and storage-based ones—are taking up to nine months. Differences in procurement mechanisms and lower participation from key power-consuming states may be contributing factors to these delays.
A transmission gap is also emerging as renewable capacity additions outpace transmission expansion due to shorter gestation periods. This gap is expected to peak in FY2027 before easing from FY2028 as new capacity comes online. Timely execution will be critical to mitigate grid curtailment risks and ensure the smooth integration of renewable energy into the national grid.
