India is on track to become the world’s second-largest renewable energy growth market by 2030, according to a new report by the International Energy Agency (IEA). The agency says global renewable power capacity will expand 2.5 times this decade, but warns that countries must close gaps in grids, financing, and policy to reach climate goals.
The Renewables 2025 report, released on October 7, projects that nearly 4,600 gigawatts (GW) of clean energy will be added worldwide by 2030. That amount equals the combined electricity capacity of China, Japan, and the European Union.
But the IEA cautions that the world is not yet on track to meet the pledge made at COP28, to triple renewable energy capacity by 2030.
“Despite remarkable momentum, the global energy transition is still not fast enough to hit the tripling target,” said Heymi Bahar, lead author of the report and senior analyst at the IEA. “Grid bottlenecks, rising financing costs, and policy uncertainty remain the biggest barriers.”
Global Growth Driven by Solar
The IEA found that solar photovoltaic (PV) systems remain the strongest driver of renewable growth, accounting for nearly 80 percent of capacity additions. By 2030, solar PV alone will generate more electricity than hydropower, becoming the largest renewable source in the world.
Wind power, both onshore and offshore, will also add significant capacity. Hydropower and geothermal will see moderate but steady increases, with geothermal hitting record installations in the United States, Japan, Indonesia, and several developing economies.
The report forecasts that renewables will supply 43 percent of global electricity generation by 2030, up from 32 percent in 2024. The share of wind and solar alone will nearly double to 28 percent.
“We’re entering an era where variable renewables dominate the power mix,” Bahar said. “The challenge is no longer deployment, but integration.”
That integration will require investments in battery storage, flexible power systems, and smart grids. Without them, more countries will face what the IEA calls “curtailment”, when power from solar and wind plants is wasted because grids cannot absorb it.
India’s Rise in Renewables
India stands out as one of the fastest-growing markets. Its renewable capacity is expected to increase 2.5 times by 2030, placing it second only to China in global growth.
The IEA credits this rise to record auction volumes, faster rooftop solar adoption, and quicker hydropower approvals. “India’s progress reflects a shift from ambition to implementation,” Bahar said.
Yet challenges remain. Transmission expansion, grid reliability, and the financial health of state distribution companies are described as “critical” to sustaining growth. The report says India can surpass its current targets under the IEA’s accelerated case scenario, provided it resolves payment delays, signs pending power purchase agreements, and strengthens renewable obligations for states.
The concentration of renewable power in a handful of states is also a challenge. Rajasthan, Gujarat, Madhya Pradesh, Tamil Nadu, Maharashtra, and Karnataka are expected to host the bulk of India’s new projects. That will require significant investment in grid flexibility and storage to balance supply and demand.
Madhya Pradesh has introduced its Renewable Energy Policy 2025, setting a target to meet 50 percent of the state’s annual power demand from renewables by 2030. The policy offers financial incentives such as a 100 percent exemption on electricity duty for ten years and 50 percent reimbursement of stamp duty for private land used in projects.
Government land is being offered at concessional rates for renewable parks, and developers are also eligible for a 50 percent waiver on wheeling charges for five years after commissioning. The state has also announced a pumped hydro storage scheme to help balance variable solar and wind power on the grid.
The policy outlines ambitious park development goals, including 10,000 MW of renewable and hybrid parks by 2027, and aims to support export-oriented projects scaling up to the same level. It also encourages wind repowering, with an identified potential of 1,562 MW by replacing older turbines with modern units.
Madhya Pradesh is also positioning itself as a major manufacturing and investment hub for renewable energy. At a recent investment session in Mumbai, Chief Minister Dr. Mohan Yadav announced that the state received proposals worth ₹74,300 crore, including ₹19,900 crore in the renewable energy sector. The new Manufacturing Zone for Power and Renewable Energy Equipment at Mohasa-Babai in Narmadapuram district aims to attract clean energy industries and create over 7,000 jobs.
Recent projects highlight the state’s progress. Tata Power has commissioned a 431 MW solar plant in Neemuch, while NTPC has signed an agreement with the state to develop 20 GW of renewable capacity along with 800 MW of pumped hydro storage.
Uneven Global Picture
While India’s outlook has improved, other regions face setbacks.
China still accounts for nearly 60 percent of new renewable additions, but growth has slowed after a shift from government-set tariffs to market-based auctions. The United States’ forecast was revised down by almost 50 percent due to policy changes, the phase-out of tax incentives, and import restrictions.
Europe’s picture is mixed. Corporate power purchase agreements and rooftop solar in countries such as Germany, Spain, Italy, and Poland have boosted growth. But offshore wind has suffered delays, rising costs, and even cancellations.
“The renewables industry is expanding faster than ever, but not evenly,” Bahar said. “Developers remain bullish, but manufacturers, particularly in wind and solar, are under severe financial strain due to overcapacity and collapsing prices.”
Paolo Frankl, head of the IEA’s Renewable Energy Division, said the next five years are crucial. “Tripling global renewable capacity by 2030 is still within reach, but it demands faster permitting, more investment in grids, and mechanisms that de-risk private capital.”
Policy Shifts and Market Strains
The report notes that major policy changes in China and the United States lowered growth expectations compared with last year’s forecast.
In the U.S., the early phase-out of federal tax credits has reduced investor confidence. “The most striking policy changes, of course, are in the United States with the One Big Beautiful Bill,” said David Victor, professor of public policy at the University of California San Diego. He added that while states like California are pushing renewables aggressively, states without such policies could see stagnation.
China’s move from subsidies to auctions has affected project economics, though the country still dominates global supply chains. More than 90 percent of global production of solar PV components and rare earth elements for wind turbines remains concentrated in China, a level that will likely continue through 2030.
The Middle East and North Africa have seen their forecasts revised upward, particularly due to Saudi Arabia’s rapid solar expansion. Pakistan has also made strides with off-grid solar installations, where households and businesses rely on rooftop panels to overcome unreliable grids.
In Europe, solar PV remains the fastest-growing segment. “Solar PV is on course to account for some 80 percent of the increase in the world’s renewable capacity over the next five years,” said Fatih Birol, executive director of the IEA.
Emerging economies in Asia and Africa are also scaling up renewables, often with international support. New auction programmes and declining solar costs are making the technology more attractive.
Raul Miranda, global programme director at Ember, an energy think tank, said the findings underscore the momentum of the sector. “The renewables revolution is unstoppable. Renewables are delivering on meeting the world’s growing demand for electricity, powering economic growth, and boosting energy security.”
But experts also highlighted looming challenges. “The report hasn’t really grappled with some of the headwinds for the industry,” said Victor. He pointed to the high land requirements for wind and solar and the costs of grid integration as future hurdles.
What Lies Ahead
The IEA notes that renewable energy’s role in transport and heating will expand only modestly. In transport, its share will rise from 4 percent today to 6 percent by 2030, driven mainly by electric vehicles in China and Europe, along with biofuels in Brazil, Indonesia, and India. In heating, the share is expected to grow from 14 percent to 18 percent, mainly through renewable electricity and biomass.
For electricity, though, the next five years will determine if the COP28 pledge of tripling renewables is achievable. Without faster reforms, the IEA warns, the world could fall short by 10–15 percent.
Bahar summed it up bluntly, “The challenge is not the ambition, but the implementation.”
For India, the stakes are particularly high. Expanding solar, wind, and hydropower could help meet its rising electricity demand, reduce dependence on coal, and create jobs in construction, manufacturing, and maintenance. But delays in grid expansion or financing could slow the momentum.
For households and businesses, the growth of renewables could mean cleaner air and more stable power supplies in the long run. For farmers, rooftop solar pumps and rural microgrids could improve irrigation and reduce diesel costs.
Yet, without stronger action, the transition could stall, leaving both economic and environmental opportunities unrealised.
As nations weigh policy choices, the IEA report makes clear that the future of renewables will depend not just on ambition, but on the speed of action.
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