The Economic Survey, tabled days before the Union Budget 2026, noted that the hurdles can be tackled through appropriate policy instruments, including innovative financing mechanisms and optimised project execution
Chief Economic Advisor V Anantha Nageswaran and others at the release of Economic Survey 2025-26 on Thursday. Pic/PTI
India must address challenges such as high capital costs, delays in land acquisition and grid availability issues to sustain its rapid renewable energy growth, the Economic Survey 2025-2026, tabled in the Parliament on Thursday said.
The Economic Survey, tabled days before the Union Budget 2026, noted that the hurdles can be tackled through appropriate policy instruments, including innovative financing mechanisms and optimised project execution.
According to the survey, India’s energy sector is undergoing a major structural transformation. The country has emerged as a global leader in renewable energy, ranking third worldwide in overall renewable energy capacity and installed solar capacity, and fourth in installed wind capacity.
India has already surpassed its target of 50 per cent installed power capacity from non-fossil fuel sources, reaching 51.93 per cent by the end of December 2025. This achievement has been driven by record annual additions to renewable energy capacity.
Strong capacity additions in 2025-26
During 2025-26 (up to 31 December 2025), India added a total of 38.61 GW of renewable energy capacity. This includes 30.16 GW of solar power, 4.47 GW of wind power, 3.24 GW of hydropower and 0.03 GW of bio-power.
The survey stressed that large-scale integration of Battery Energy Storage Systems (BESS) and Pumped Storage Hydropower (PSP) is essential to address the variability of renewable energy.
Such systems would help ensure grid stability, manage peak demand, and enable the reliable and large-scale adoption of renewables, supporting the transition to a clean, secure and resilient power system.
Rising input costs a concern
The Economic Survey also warned that renewable energy systems, particularly solar and wind, are highly material-intensive and require capital-intensive energy storage technologies for grid integration.
It highlighted that solar panels with a capacity of 1 GW require around 18.5 tonnes of silver, 2,000-3,000 tonnes of polysilicon, and 10,252 tonnes of aluminium.
The survey added that prices of silver and gold are likely to continue rising, driven by sustained demand as safe-haven investments amid ongoing global uncertainties.
Rising silver prices, in particular, could impact the cost of solar panel manufacturing.
Long-term renewable energy target
India has set an ambitious target of achieving 500 GW of non-fossil fuel-based capacity, the survey noted, underlining the importance of addressing current bottlenecks to maintain momentum.
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