Introduction
Electricity lies at the heart of modern economies and underpins India’s economic growth story. Globally, electricity accounted for 21% of total final energy consumption in 2024. In addition, it is the primary energy source for sectors representing over 40% of global economic activity and the main source of energy for households.
India has set ambitious targets for its power sector as part of its clean energy transition. The country aims to achieve 500 gigawatts (GW) of non-fossil fuel installed capacity by 2030, reflecting its commitment to decarbonisation and sustainable economic growth. In FY2025, India added 29 GW of renewable capacity, which was led by 24 GW of solar, pushing cumulative solar installations past 100 GW. By October 2025, India’s total installed renewable capacity reached 251 GW, spanning solar, wind, hydro and bio-power sources. These additions enabled India to achieve 50% of installed power capacity from non-fossil sources, meeting its original 2030 target five years ahead of schedule. Sustained national and state-level efforts, backed by targeted policies and flagship programmes, have expanded clean energy access and strengthened the foundation for faster renewable growth. India’s global ambitions, including hosting the 33rd Conference of the Parties (COP33) in 2028, further signal its commitment to aligning economic growth with environmental stewardship.
Rising generation capacity has been accompanied by growing electricity demand. India’s electricity consumption increased by 33% from FY2021 to 1,694 billion units (BUs) in FY2025, translating to a compounded annual growth rate (CAGR) of 7.4%. This surge will further accelerate because of expanding industrial and commercial activities, rising ownership of appliances such as air conditioners, electrification of the mobility sector, and the proliferation of data centres and digital services. Renewable generation now supplies a growing share of this rising demand, with over 404BUs generated from renewables, roughly 22% of total electricity generation in FY2025. Projections under the International Energy Agency’s (IEA) current policy scenario indicate an 80% increase in electricity demand by 2035, the fastest among emerging economies, driving the need for higher overall electricity generation.
However, the clean energy transition has not been uniform across Indian states. Such divergence is inevitable at the sub-national level given the structural and historical factors, including differences in resource endowment, development legacies, states’ fiscal and economic conditions, rural-urban composition, and institutional capacity within the power sector. Each state presents unique challenges. While some have advanced rapidly in deploying renewable energy and strengthening grid infrastructure, others are only now gathering momentum, although with encouraging prospects for accelerated growth. Understanding these state-level differences is essential for designing policies and interventions. A purely national overview risks overlooking the distinct progress, constraints, and opportunities that exist across states.
At the same time, a Just Transition lens capturing socio-economic dimensions such as livelihoods, fiscal dependence and energy security is also important for certain states. For example, Jharkhand has a significant share of state revenue linked to legacy sectors, making socio-economic transition risks especially salient and requiring careful planning. However, these aspects, while critical, are not assessed in this report, which focuses exclusively on electricity transition indicators valid across the 21 states considered.
IEEFA and Ember launched the first edition of the State Electricity Transition (SET) report in 2023 to track states’ progress and identify areas requiring urgent attention, followed by an update in 2024, and now in 2026. The report offers data-driven insights to help policymakers make informed, actionable decisions that support a faster, resilient, and sustainable clean electricity transition across Indian states.
What this report adds
This edition of the SET report builds on the previous two editions, incorporating more refined parameters and dimensions to capture the nuances and new developments in the state-level electricity transition. Details of the parameter-level updates are captured in the methodology section. The objective to provide clear, data-driven insights into how Indian states are progressing across key dimensions of the clean electricity transition remains unchanged.
State categorisation based on their dimension-level performance
The dimension-level analysis and insights presented in the following sections are based on the classification of 21 states into three groups, reflecting their relative performance across the assessed parameters. These groups are: High performers (1–7); states on the rise (8–14); states with potential to accelerate (15–21). Insights for each group are presented in separate sub-sections.
