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India Could Add 45-50 GW of Renewable Energy Annually Over Next Two Years: Report

India has the potential to add approximately 45 to 50 gigawatts of renewable energy capacity per year across the next two years, according to a recent power sector update by Nuvama Research. This projected expansion is backed by a substantial project pipeline, including existing power purchase agreements and solar rooftop installations.

What Happened

According to research firm Nuvama, the pace of clean energy installations in India is positioned to accelerate. The report highlights that approximately 2.26 lakh megawatts (226 GW) of renewable capacity has been tendered since FY23, with about 1.26 lakh megawatts (126 GW) awarded so far. Of this tendered volume, roughly 86,000 megawatts (86 GW), or 38 percent, has entered into signed power purchase agreements (PPAs), while nearly 1.40 lakh megawatts (140 GW) is yet to be converted into PPAs.

Backed by the 86 GW of existing agreements, Nuvama projects that annual additions of 45 to 50 GW are achievable over the coming two years. The research note indicated that capacity buildout is already underway, with 13.3 GW installed year-to-date in FY27. As of the end of June 2026, the country’s total installed power capacity stood at approximately 549 GW.

Key Highlights

  • Annual Projections: Anticipated renewable additions of 45 to 50 GW per year over the next two years, inclusive of rooftop solar.
  • Tendering Breakdown: Around 2.26 lakh MW tendered since FY23, with 1.26 lakh MW awarded.
  • PPA Pipeline: About 86 GW (38 percent of tendered volume) holds signed PPAs, leaving roughly 140 GW awaiting conversion into agreements.
  • Demand Expansion: Electricity demand rose 11.2 percent year-on-year in July 2026 to around 171 billion units, while peak demand reached nearly 270 GW, up 22 percent compared to 220 GW in July 2025.
  • Generation Mix: Thermal power comprised around 67 percent of generation, while renewable energy contributed approximately 20 percent.
  • Thermal Plant Load Factor: Plant utilisation climbed to 68.2 percent in July, rising from 62.3 percent in the corresponding period of the prior year.
  • Pricing Variations: Power rates varied heavily through the day, registering around Rs 2.8 per kWh during solar hours and rising to around Rs 7.5 per kWh during non-solar evening periods in July.
  • Execution Obstacles: Labour shortages have caused bottlenecks for engineering, procurement, and construction (EPC) contractors in the transmission sector.

Why This Matters

The expansion in renewable capacity comes alongside sustained growth in domestic power consumption. Peak electricity demand touched nearly 270 GW in July 2026, putting higher demands on the power grid and driving thermal plant load factors up to 68.2 percent. While thermal plants continue to carry the bulk of generation at 67 percent, expanding the renewable footprint aims to integrate more clean supply into a grid experiencing double-digit demand increases.

Additionally, daily power market pricing shows stark divergences based on time of day. Power generated during peak solar hours cleared at roughly Rs 2.8 per kWh, whereas evening non-solar power prices reached about Rs 7.5 per kWh in July. Bridging these differences depends on resolving transmission infrastructure hurdles and expanding capacity.

What to Watch Next

Execution constraints in the transmission network remain a central factor to track. Labour shortages affecting EPC players have created challenges, though Nuvama expects these conditions to ease during the second half of FY27, which could facilitate smoother project delivery. Observers will also be monitoring how rapidly the remaining 140 GW of tendered capacity is converted into signed PPAs.

Frequently Asked Questions

How much renewable capacity could India add annually over the next two years?

Nuvama Research estimates that India can add between 45 and 50 gigawatts of renewable energy capacity annually over the next two years, including rooftop solar.

How much renewable capacity currently has signed PPAs?

Approximately 86 gigawatts (86,000 megawatts) of capacity has signed PPAs, representing 38 percent of the total tendered capacity since FY23.

What is India’s total installed power capacity?

According to the report, India’s total installed power capacity reached approximately 549 gigawatts at the end of June 2026.

What challenges are currently impacting the sector?

Labour shortages have posed execution issues for EPC contractors within the transmission sector, though these bottlenecks are expected to ease in the second half of FY27.

Source: Based on a research report from Nuvama Research, reported via ANI.