Mixed resources to contribute 20-25% of 75-85 Gw RE capacity in FY26, FY27

Policy support and robust pipeline to drive additions; transmission and PPA delays remain key execution risks

India’s renewable energy (RE) sector is shifting from standalone solar and wind projects to mixed resource configurations to improve grid reliability. Capacity additions are being supported by  strong policy backing, a healthy project pipeline, and upcoming domestic manufacturing capacities  for renewable energy generation equipment, which together are expected to support sustained  growth. However, transmission constraints and PPA delays for under-construction projects remain near-term risks. 

India is increasingly turning to mixed-resource power projects to meet its climate transition goal  of 500 Gw of clean energy by 2030. The growing focus on renewables-led capacity expansion can be seen in the country’s non-fossil fuel base of nearly 259 Gw accounting for 51 per cent of the installed capacity of 505 Gw as of October 2025, up from a 39 per cent in FY21.   

With the rising share of renewable energy in the mix, addressing the intermittent nature of  clean power has become critical.  Mixed-resource projects — which integrate solar and wind power  with battery energy storage systems (BESS), or pair BESS with standalone renewable capacity —  offer a viable solution. By combining two or more renewable sources, these projects reduce power  variability, enhance grid stability, and enable more predictable and sustainable generation,  thereby improving capacity utilisation and grid integration. 

Recognising these benefits, adoption of mixed-resource projects has accelerated. In FY25,  55 per cent of total capacity allocations were from mixed resources, rising further to 88 per cent in the April– October period of FY26. 

Regulatory support has also played a key role. The Central Electricity Authority has mandated  that standalone solar projects be paired with storage equivalent to 10 per cent of installed capacity for  two hours. In addition, the Central Electricity Regulatory Commission has recognised standalone  and co-located BESS as distinct assets, allowing their procurement and tariff recovery through  regulated mechanisms. To boost adoption, the 100 per cent Inter-State Transmission System  (ISTS) charge waiver for eligible co-located renewable storage-based projects has been extended  to June 2028, while the waiver for standalone renewable projects expired in June 2025. 

Apart from allocations, capacity additions in FY26 have also been healthy. Solar and  wind capacity additions (including capacities commissioned as part of mixed-resource projects) in the first eight months of FY26 were supported by an active project pipeline, as developers  rushed to capitalise on policy incentives and transmission waivers. Nearly 24 Gw of solar and 3.6 Gw of wind capacity was added between April and October, already surpassing total  additions in FY25. 

Further, mixed-resource projects are expected to benefit from strengthening domestic supply  chains for renewable generation equipment. In wind energy, a significant share of manufacturing  and sourcing is already domestically anchored. Solar manufacturing is also scaling up, supported  by policy measures such as the Approved List of Models and Manufacturers (ALMM) and the  production-linked incentive scheme. 

That said, the growth outlook for renewable energy projects remains exposed to two key  challenges for the sector. One, ramp-up of transmission infrastructure and, two, material delays  in closing open PPAs for capacities awarded in the utility space. 

Given the longer gestation period for transmission projects — nearly three years, compared with  around two years for renewable generation — timely execution is critical to avoid connectivity  delays and associated risks. Recognising the need to scale up transmission capacity, the  government has significantly accelerated project awards, with the value of awarded projects  nearly doubling to ₹1.5 trillion inFY25 from ₹0.7 trillion across FY23 and  FY24. While this expansion lays the groundwork for a substantial rise in transmission  capacity in the years ahead, it also elevates execution risks, as the unprecedented pace of rollout  intensifies demands for land, equipment, and skilled manpower, increasing the risk of delays. 

Another major risk is the increase in delay in signing of PPAs. As of October, PPAs for only  48 per cent of the 85 Gw utility project pipeline had been signed. A key reason for open PPAs was the  time taken for REIAs to enter into power supply agreements with state discoms at discovered  tariffs. A higher acceptance rate from state discoms for new-age projects — mainly storage backed — will be key to ensure closure of open capacities.   

To sum up, the near-term trajectory of India’s renewable sector is one of transformation rather  than simple scale-up. Mixed resource projects blend generation and flexibility to meet the dual  imperatives of affordability and reliability. 

The combination of policy support and maturing storage  economics should sustain additions. But the cadence will be influenced by tender issuance, the off-take abilities of discoms and evolving grid-availability requirements.