Industry challenges and future outlook
The solar power segment has emerged as the key driver of capacity addition in the RE sector, with significant capacity additions over the past decade, which in turn increased its share in the overall mix to 50.7% as of August 2025 from 3.6% as of March 2014.
ALSO READIndia’s outbound FDI moderates to $4.41 billion in September; equity commitments surge
Renewables contributed 14.0% to all-India electricity generation in the current fiscal year, up from 13.0% in FY24 and 7.8% in FY18. Icra projects this share to rise to over 16.0% in FY26, driven largely by solar power.Most of the increase in RE generation has been driven by solar power due to higher growth in the segment’s installed capacity. Icra expects this trend to continue in FY26 with RE generation set to increase to more than 16.0%.