Aerem Highlights State-Level Gaps in India’s Clean Energy Transition Despite Renewable Growth

Aerem, a distributed solar solutions and a solar finance enabler, has said that India’s clean electricity transition is moving forward at a strong pace, but the next phase of progress will depend on how quickly states can close persistent gaps in grid readiness, distribution utility performance, market enablers and distributed clean energy adoption.

The Ember-IEEFA State Electricity Transition (SET) 2026 report shows that India’s electricity demand continues to grow rapidly, while renewable energy has also expanded at scale. In FY2025, India added 29 GW of renewable capacity, including 24 GW of solar, and total installed renewable capacity reached 251 GW by October 2025. India also achieved 50 percent of installed power capacity from non-fossil sources five years ahead of its original 2030 target, underscoring the progress made by the country’s clean energy transition.

At the same time, the report makes clear that India’s transition remains uneven across states. Some states are leading in decarbonisation, others are ahead on power system readiness, and a separate group is progressing on market enablers such as green tariffs, green open access, EV adoption and storage deployment. However, no state is consistently strong across all three dimensions, showing that India’s electricity transition is still fragmented at the sub-national level.

The report highlights that Karnataka, Himachal Pradesh and Kerala are among the strongest performers on decarbonisation, while Delhi and Haryana lead on power ecosystem readiness. Andhra Pradesh, Uttar Pradesh and Rajasthan stand out as market enablers, with progress in policy support, green tariffs, green open access and solar-hour-aligned time-of-day tariffs. Even so, these gains have not yet translated into a fully integrated, system-wide transition across the country.

Several gaps continue to constrain faster progress. The report notes that states such as Maharashtra and Rajasthan still need to strengthen power ecosystem readiness, while Gujarat has room to improve renewable energy utilisation despite progress in other areas. West Bengal, Jharkhand and Telangana remain at an early stage of transition and need deeper structural interventions, including stronger DISCOM finances, better planning frameworks and clearer long-term policy signals.

Anand Jain, Founder, Aerem, said, “India has made impressive progress on renewable capacity addition, but the SET 2026 findings show that the transition is still uneven across states. The next leap will come from closing the gaps that slow down real-world adoption especially in distributed solar, grid readiness, smart metering, storage and market participation. If India wants to turn clean energy ambition into universal access and dependable execution, state-level implementation has to move faster and more consistently.”

India’s rising electricity demand adds urgency to this challenge. Consumption increased by 33 percent from FY2021 to 1,694 billion units in FY2025, driven by economic growth, urbanisation, industrial activity, mobility electrification and digital infrastructure expansion. Renewable generation supplied about 22 percent of total electricity generation in FY2025, showing growing momentum, but also the scale of the remaining task.

Aerem believes the findings reinforce the need for stronger state-level execution, better market design and wider deployment of distributed clean energy solutions to support India’s energy security and long-term growth. As the country advances toward a cleaner power system, the focus must now shift from ambition to implementation, with every state contributing to a more resilient and balanced transition.