For long, the case for renewable energy in India has been made through appeals to our collective conscience. Climate pledges, doing the right thing for the next generation and the powerful emotional vision of a clean and green world drove our agenda.
That argument was never wrong. It was just incomplete. The more powerful case today for renewables rests on two hard ideas: economic competitiveness and national security.
In 2025-26, India added over 50GW of non-fossil-fuel capacity, almost double that of the previous year. Total non-fossil installed capacity has risen to 280GW and India is now the world’s third-largest renewable energy market, behind China and the US. This pace needs to be sustained.
The Central Electricity Authority projects peak electricity demand to rise to nearly 388GW by 2031-32, with total consumption almost doubling over the decade. Industry, urbanization, cooling, electric vehicles: every familiar driver is intact. But there is a new one few foresaw five years ago: AI infrastructure and data centres.
Data centre capacity in India is expected to expand several-fold over the next five years. While conventional sources can provide baseload supply, they face growing challenges in meeting the required combination of low carbon intensity, flexibility and rapid scalability, making renewable-led hybrid solutions important.
India’s utility-scale solar tariffs have declined roughly 82% over the last decade. Solar power paired with battery storage has, in recent tenders, cleared below the average pooled procurement cost of several state distribution companies. This means round-the-clock renewable power is often now the cheapest form of new generation. When the economics is so compelling, capital follows naturally.
Speed is another factor. A 1GW solar park can be commissioned in under two years. A comparable thermal plant takes five to seven; a nuclear one over a decade. In a country that must add capacity faster than at any point in its history, execution speed is itself a competitive moat.
India’s 500GW non-fossil capacity target for 2030 is often discussed in the context of climate commitments and international negotiations. That context is important. Yet, the target also reflects a broader set of economic and strategic considerations, including energy security, digital infrastructure and India’s long-term growth needs.
India imports a majority of its crude oil and a substantial share of its natural gas. Every dollar spent on imported fossil fuel is a dollar that leaves our shores. Every megawatt of renewable capacity, by contrast, is powered by domestic resources: sunlight, wind and land, which no shipping lane, sanctions regime or geopolitical flashpoint can disrupt.
Recent events in West Asia have underscored the risks of importing fuels. Renewables, thus, should be seen as a security strategy with co-climate benefits, rather than a climate strategy with security benefits.
The Approved List of Models and Manufacturers framework has matured into the clearest expression of India’s industrial intent: List-I for modules is in force, List-II for cells came in mid-2026, and List-III for wafers and ingots is on the runway. An energy transition built on imported cells is not, in any meaningful sense, a sovereign endeavour. The next phase must balance localization with cost competitiveness.
We must address three constraints to sustain renewables expansion. The first is the grid. In April 2025, the power systems of Spain and Portugal experienced a cascading blackout that affected tens of millions of people for the better part of a day. An expert report concluded that it was caused by voltage fluctuations and gaps in reactive power control: failures of grid architecture, i.e., not of renewable generation itself.
Spain had generation but lacked the grid to handle it. India must absorb this lesson as an argument to treat grid modernization with the same national focus once reserved for highways. A National Grid Modernization Mission—with its structure, funding architecture and political ownership modelled on India’s Bharatmala—is arguably the most consequential reform this sector needs.
The second is storage. Solar alone is no longer the destination. The next decade belongs to firm, despatchable, round-the-clock power, and that requires battery storage at a scale India has not yet attempted. Global battery prices have fallen sharply and the trajectory continues to surprise on the downside. With the right combination of viability gap funding, energy storage obligations and competitive tendering, much of which is already in motion, this will be resolved within the decade.
The third is the ground reality of land, permits and clearances. Renewables, at their core, are an infrastructure business. They need large tracts in remote terrain often riddled with complexity.
The states that moved fast have done so by offering pre-acquired land in dedicated renewable zones, concessional lease terms and single-window clearances. This must be replicated. If India can solve for grid, storage and execution, renewables will emerge as one of India’s competitive moats.
The author is director, Aditya Birla Group.