India’s renewable energy sector is moving into a new phase of growth, with policy increasingly focused on not only capacity addition but also grid integration, energy storage, domestic manufacturing, distributed generation and emerging clean fuels. Indian Infrastructure takes a look at the key policy and regulatory highlights of the past year…
Policy initiatives
The solar space saw several key policy announcements. In September 2025, the Ministry of New and Renewable Energy (MNRE) extended the Solar Parks and Ultra Mega Solar Power Projects Scheme to March 2029, primarily to complete ongoing projects and clear existing commitments. The government also strengthened rooftop and distributed solar implementation under the PM Surya Ghar and PM-KUSUM initiatives by simplifying documentation and improving verification procedures. In May 2026, the MNRE introduced a standard warranty framework requiring solar PV manufacturers to provide a minimum 10-year product warranty and 25-year limited power output warranty for modules deployed under specified government schemes.
Domestic manufacturing has become another major policy priority. In September 2025, the MNRE proposed the Approved List of Models and Manufacturers (ALMM) List-III for solar wafers, with implementation planned from June 2028 and requirements for at least three independent manufacturers with a combined capacity of 15 GW. ALMM List-II for solar cells has subsequently been expanded, while a limited transition window for certain projects has been provided until December 2026. In the same month, the government extended the commissioning timeline under the solar production-linked incentive (PLI) scheme by two years to address procurement and implementation challenges. More recently, in August 2026, the union cabinet approved the Pradhan Mantri Surya Sarovar Yojana, with an outlay of Rs 50.7 billion to develop 5,000 MW of floating solar PV projects with co-located energy storage of at least two hours (10,000 MWh). The projects will be sanctioned during the period 2026-27 to 2030-31, with financial support continuing until 2032-33. In March 2026, the Central Pollution Control Board issued the Guidelines for Storage and Handling of Waste Solar Photovoltaic Modules or Panels or Cells under the E-Waste (Management) Rules, 2022. The guidelines prohibit open dumping and require recyclable solar waste to be handed over to registered e-waste recyclers, while prescribing safe collection, storage and handling practices.
Wind policy initiatives during the year have focused on strengthening domestic manufacturing and quality standards. In December 2025, the MNRE revised the ALMM-Wind and ALMM-WTC procedures to strengthen turbine performance, safety and certification requirements. In February 2026, the MNRE provided additional time for compliance with special wind-turbine bearing requirements, addressing supply chain constraints and allowing exemptions for eligible projects.
India’s green hydrogen policy framework is increasingly focused on standardisation, certification and development of a domestic hydrogen ecosystem. In March 2026, the MNRE issued standards for green ammonia and green methanol, establishing emission thresholds of 0.38 kg CO2e per kg of ammonia and 0.44 kg CO2e per kg of methanol respectively. The policy focus is also expanding towards hydrogen hubs and technology development.
In the bioenergy space, the union cabinet approved GOBARdhan, the National Circular Bioenergy Scheme, with an outlay of Rs 237.31 billion for the period 2026-27 to 2035-36. It aims to expand compressed biogas (CBG) production by converting agricultural residue, cattle dung and organic waste into clean fuel and organic manure. The scheme seeks to ensure assured CBG offtake and blending target of 3 per cent in 2026-27, to be increased to 4 per cent in 2027-28 and 5 per cent in 2028-29, providing long-term demand certainty for producers.
Future outlook
The outlook remains strong, supported by increased government spending, ambitious generation targets and rapid expansion of transmission and energy storage. The MNRE has received a budget allocation of Rs 329.14 billion for 2026-27, up from Rs 265.49 billion in 2025-26. Solar accounts for the largest share, including Rs 220 billion for PM Surya Ghar Muft Bijli Scheme and Rs 50 billion for PM-KUSUM. Other allocations include Rs 6 billion for the National Green Hydrogen Mission, Rs 5.51 billion for wind and hydro, Rs 2.75 billion for bioenergy and Rs 5.99 billion for green energy corridors.
The Central Electricity Authority (CEA) projects a total renewable installed capacity of 1,121 GW by 2035-36, including 509 GW of solar, 155 GW of wind, 78 GW of large hydro and 22 GW of biomass, waste-to-energy and small hydro. Energy storage will be crucial, with 174 GW/888 GWh planned through battery energy storage systems and pumped storage projects (PSPs). The government is also targeting around 100 GW of PSP capacity by 2035-36, requiring an estimated investment of Rs 5,813.16 billion. In March 2026, the union cabinet approved the Small Hydro Power Development Scheme, which aims to add 1,500 MW by 2031. Transmission expansion is progressing alongside generation. The CEA’s March 2026 Transmission Plan targets the integration of over 900 GW of non-fossil capacity by 2035-36, supported by 137,500 ckt km of transmission lines and 827,600 MVA of substation capacity. All in all, the renewable energy sector has seen positive policy developments over the past year. The focus now needs to be on effective implementation.
Pankhudi Jha
