RE capacity addition remained strong at 20.2 GW in 5M FY2027, driven by the large project pipeline and continued execution of solar, wind and hybrid projects. However, capacity addition is expected to moderate to around 45 GW in FY2027 compared to 50.9 GW in FY2026 due to transmission connectivity constraints and delays in signing PPAs/PSAs.

• ICRA’s outlook for the renewable energy (RE) sector remains Stable, led by strong policy support, superior tariff competitiveness and the sustainability initiatives by large commercial and industrial (C&I) customers. However, challenges remain on the execution front, including land and transmission infrastructure, delays in signing power purchase agreements (PPAs), exposure to equipment prices and distribution utility finances.
• The sector witnessed a capacity addition of 20.2 GW in 5M FY2027, driven by strong execution across solar, wind and hybrid projects. The pace of capacity addition remains supported by a large under-development pipeline and increasing renewable energy procurement requirements.

Source: ICRA Research, Central Electricity Authority (CEA), Ministry of New & Renewable Energy (MNRE)