India’s energy sector is undergoing a transformative shift, driven by supportive policies that can help achieve sustainability, self-reliance, and carbon neutrality. Laws and regulatory initiatives play a major role in shaping the demand, supply, and infrastructure sides of India’s renewable energy landscape.
Demand-Side Regulations
- Net Zero Commitments: India has pledged to achieve net zero emissions by 2070. Key interim goals include achieving 500 GW of non-fossil fuel-based energy capacity and reducing emissions intensity of GDP by 45% by 2030.
- National Green Hydrogen Mission: Launched in 2022, this mission aims to establish India as a global green hydrogen hub. It targets an annual production of 5 million metric tonnes of green hydrogen with an associated renewable energy capacity of 125 GW.
- CPSU Scheme Phase 2: This scheme, designed to enhance India’s energy security, aims to develop 12 GW of solar power through government producers. It offers Viability Gap Funding (VGF) of up to ₹7 million per MW to support project viability.
- Renewable Purchase Obligation (RPO): RPO mandates distribution companies, captive power plants, and open-access consumers to source a specific percentage of their energy from renewable sources. The long-term trajectory for RPO is defined until 2030, promoting solar and non-solar renewable energy adoption.
- Rooftop Solar Demand:
- PM Surya Ghar Muft Bijli Yojana: Launched in 2024, this scheme aims to solarize 10 million households, enabling free electricity generation of up to 300 units per month.
- Grid Connected Rooftop Solar Scheme: As of June 2024, grid-connected rooftop solar capacity stood at 12.92 GW. The government has extended the 40 GW rooftop target to 2026.
- KUSUM Scheme: This initiative supports farmers by providing subsidies of up to 30-50% for solar pump installations. It targets adding 34.8 GW of rooftop solar capacity by 2026, with central financial support of ₹344.22 billion.
Supply-Side Regulations
- Production Linked Incentive (PLI) Scheme: Introduced in 2020 and later expanded, the PLI scheme allocates ₹240 billion to support domestic solar PV manufacturing. It targets 39.6 GW of solar module production capacity.
- Approved List of Models & Manufacturers (ALMM): Introduced in 2019, this list ensures that only certified and high-quality solar modules are used in government-backed projects.
- Basic Customs Duty (BCD): Effective from April 2022, BCD imposes a 40% duty on imported solar modules and 25% on solar cells to promote domestic manufacturing.
- Domestic Content Requirement (DCR): Mandates the use of domestically manufactured solar modules in certain government projects, strengthening local manufacturing.
- State Incentives: Several states offer tax benefits, land subsidies, and electricity duty exemptions to renewable energy projects, fostering a competitive landscape.
Infrastructure Development Initiatives
- Inter-State Transmission System (ISTS): The government has waived ISTS charges for renewable projects commissioned by June 2025, reducing transmission costs.
- Ultra-Mega Renewable Energy Parks: These parks provide land and transmission infrastructure to developers on a plug-and-play basis, reducing project risks.
- Green Energy Corridor Scheme: This initiative focuses on strengthening intra-state and inter-state transmission networks to facilitate renewable energy evacuation.
- Transmission & Distribution (T&D) Infrastructure Growth: India’s T&D infrastructure is expanding at a CAGR of 4-7%, supporting higher renewable energy integration.
Conclusion
India’s regulatory framework is robust, with clear policies driving renewable energy expansion. Through demand-side initiatives, supply-side incentives, and infrastructure development, the nation is progressing towards its ambitious sustainability goals. These policies not only ensure energy security but also position India as a global leader in clean energy.
