India's clean electricity transition is progressing across major states, though unevenly due to structural differences, according to a report by IEEFA and Ember.
While some states lead in renewable energy and policy innovation, others lag due to resource and institutional disparities.
The report emphasises the need for targeted policies to address these gaps and ensure balanced progress.
India’s transition toward cleaner electricity is gaining traction across most major states, though progress remains uneven due to structural and institutional differences, according to a new analysis released on February 23, 2026.
The report, Indian States’ Electricity Transition (SET) by the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember, assessed 21 states representing roughly 95 per cent of the country’s power demand and concluded that India’s energy transition is no longer driven by a handful of leaders. Instead, a wider group of states is advancing across different dimensions of power sector reform, renewable energy expansion and electrification.
The transition, however, is unfolding differently across states, shaped by variations in resource endowments, development pathways, and institutional capacities. While some states are already leading in renewable energy deployment and grid readiness, others are building momentum, presenting significant opportunities for accelerated progress through targeted, state-specific policy interventions.
The report came against the backdrop of India’s electricity demand continuing to rise rapidly, driven by sustained economic growth, urbanisation and the electrification of transport, industry and emerging digital infrastructure. Electricity is the primary energy source for sectors representing over 40 per cent of global economic activity and the main source of energy for households. With the power sector accounting for nearly half of India’s total carbon dioxide emissions, accelerating the transition to clean electricity is critical to achieving the climate objectives laid out in India’s National Determined Contribution (NDC).
India aims to achieve 500 gigawatt (GW) of non-fossil fuel installed capacity by 2030, reflecting its commitment to decarbonisation and sustainable economic growth. In FY25, India added 29 GW of renewable capacity, which was led by 24 GW of solar, pushing cumulative solar installations past 100GW.
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 per cent of installed power capacity from non-fossil sources, meeting its original 2030 target five years ahead of schedule. Despite this milestone, the country struggles to generate power to its full capacity.
Rising generation capacity has been accompanied by growing electricity demand. India’s electricity consumption increased by 33 per cent from FY21 to 1,694 billion units in FY25, translating to a compounded annual growth rate of 7.4 per cent.
Divergence in renewable energy growth 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, according to Vibhuti Garg, director, South Asia, IEEFA, and a co-author of the report.
“Going forward, understanding these state-level differences and gaps in progress is essential for designing targeted policies and interventions,” she added.
Karnataka retained its position as a top performer in reducing power sector emissions intensity, alongside Himachal Pradesh and Kerala. These states have increased renewable procurement and begun decoupling economic growth from emissions, although further progress will depend on strengthening grid infrastructure and improving the financial health of distribution companies.
Tamil Nadu, Maharashtra and Rajasthan also recorded improvements, supported by expanded energy efficiency measures and policy interventions.
In measures of power ecosystem performance, including supply reliability, distributed solar adoption and utility operations, Delhi and Haryana continued to rank among the strongest performers.
Chhattisgarh recorded one of the lowest supply shortages nationwide at 0.07 per cent in fiscal year 2025, while Bihar and Assam demonstrated rapid progress in smart meter deployment, a key reform aimed at improving billing efficiency and financial sustainability in the power sector.
Analysts said improving utility finances and expanding digital infrastructure will be critical to accelerating renewable procurement across states.
Andhra Pradesh, Uttar Pradesh and Rajasthan emerged as strong performers in policy-driven transition measures, supported by green tariffs, time-of-day electricity pricing and initiatives promoting electric vehicles and energy storage.
Delhi recorded the country’s highest electric vehicle adoption rate at 11.6 per cent, with Assam close behind at 11 per cent, reflecting growing momentum in transport electrification alongside power sector reforms.
Bihar was identified as a rising contender due to new green tariff provisions, expanding renewable targets and efforts to integrate energy storage through competitive auctions.
Bihar’s policy proactiveness, such as offering a green tariff, solar-hour-aligned time-of-day tariffs, rising electric vehicle adoption and various auctions to incorporate energy storage in its portfolio, has made it well prepared to accelerate its transition. Focusing on tapping more of its renewable potential and increasing participation in short-term green markets offers significant gains, the report said.
Despite broad progress, West Bengal, Telangana and Jharkhand remained in early stages of transition and require institutional strengthening, improved utility finances and clearer long-term policy frameworks, the report noted.
Co-author Ruchita Shah, energy analyst, Ember, said, “India’s electricity transition is maturing into a multi-speed transition, where instead of a single leader across all areas, we are witnessing new leaders in specific areas. This requires a more targeted approach to policies and interventions to ensure the momentum is evenly spread.”