Press release

Unlocking Renewable Energy in Chhattisgarh

Chhattisgarh’s energy sector received over INR 16,672 crore in government support in fiscal year 2024, with fossil fuel subsidies outweighing clean energy support four times.

November 7, 2025

Raipur, November 7, 2025—Chhattisgarh's energy sector received more than INR 16,672 crore in government support in FY2024—but subsidies and investments for fossil fuels were four times higher than those for renewable energy, finds a new report that urges the state to diversify its support toward clean energy to safeguard its economy and communities.

The analysis by the International Institute for Sustainable Development and Swaniti Initiative, Mapping India’s State-Level Energy Transition: Chhattisgarh, shows that of the total support, INR 12,648 crore (USD 1.5 billion) came in the form of subsidies, while public sector undertakings invested INR 4,024 crore (USD 465 million). Coal received the largest share of all quantified subsidies (26%), while renewable energy accounted for only 8% of support.

At the same time, energy-related revenues in Chhattisgarh reached INR 22,532 crore (USD 2.7 billion)—22% of the state’s total revenues. In total, 80% of the energy-related revenues came from fossil fuels—38% from coal and 40% from oil and gas—leaving the state heavily exposed to shifts in future energy landscapes.

“Proactive fiscal planning has never been more important for Chhattisgarh," said Shruti Sharma, Lead in Affordable Energy at IISD. “With nearly a quarter of state revenues tied to fossil fuels, diversifying energy resources and revenue streams is critical to protect jobs, secure long-term growth, and deliver on the state’s vision of Viksit Chhattisgarh 2047.”

With the state’s economy anchored in coal, the report outlines a roadmap for how Chhattisgarh can leverage its traditional energy strengths to lead a just and sustainable transition, safeguarding its economy and communities while aligning with India's national clean energy goals.

The study found that Chhattisgarh, with just 2% of India’s population, provides a substantial share of the nation's energy supply, producing over 21% of its fossil fuels and hosting 7% of its installed thermal power capacity. This presents a significant opportunity for the state to spearhead innovation and investment in the clean energy sector.

The authors of the report urge state and central governments to

  • align government support with net-zero targets by establishing clear milestones in Chhattisgarh’s Vision 2047 plan and partnering with NITI Aayog on a green-budgeting exercise.
  • better target electricity subsidies to low-income, low-consuming households and redirect savings into rooftop solar, solar pumps, small-scale wind, and repurposed thermal assets.
  • diversify revenue beyond coal, oil, and gas by enhancing production of minerals like iron ore, bauxite, and limestone, and align industrial development with the state’s long-term decarbonization goals.
  • establish a state-led coordination committee with key departments and stakeholders to design social support mechanisms for coal-dependent workers and communities, while collaborating with the Ministry of Coal and coal firm Southeastern Coalfields Limited to diversify operations, create alternative employment, and drive just transition planning.

Recognizing the need for just transition, particularly in older coal regions where resource exhaustion has already set in, the Swaniti Initiative also assessed the coal transition vulnerability of 52 districts in India through an index. The findings show that nearly 20 of the 52 districts show high levels of vulnerability. Of the six coal districts of Chhattisgarh, three are highly vulnerable. 

“Chhattisgarh will be a high coal-producing state in the coming decade; however, some of its old regions, such as Chirimiri, where coal reserves have depleted, will need immediate planning. This can also serve as a blueprint for future just transition planning in districts which are currently producing big,” said Chinmayi Shalya, Senior Fellow, Swaniti Initiative.

The report recommends that Chhattisgarh proactively plan its energy transition, identifying significant areas where state budgeting can drive local economic growth, create jobs, and improve energy access for its people, while aligning with national policy objectives.

Media contacts

Shruti Sharma, Lead - Affordable Energy, IISD: [email protected] 
Madhulika Verma, Senior Communication Officer, IISD: [email protected] 
Chinmayi Shalya, Senior Fellow, Swaniti Initiative: [email protected]

About Swaniti Global Initiative

Swaniti Global Initiative (SGI) believes that the climate is a time-bound crisis, and the clock is ticking. We need an ‘all-hands-on-deck’ approach to resolve the crisis. Thus, we work to the strength of each community stakeholder to create impact. Specifically, we unlock government resources and connect to reach last mile beneficiaries, leverage the effective models of private sector and civil society partners, and sustain programs through the passion and commitment of communities. With these prongs Swaniti leverages it’s talented teams within communities to assess gaps, find the right partners and then implement programs in a time on ground and build the capabilities of communities to sustain them through tech powered tools and local platforms. 
 

Press release details

Topic
Energy
Subsidies
Climate Change Mitigation
Region
India
Project
Budgeting for India’s Energy Transition
Impact area
Sustainable Economies
Climate
Report
Mapping India's State-Level Energy Transition: Chhattisgarh report cover showing people working in a field with powerlines and towers in the background.

Mapping India's State-Level Energy Transition

Chhattisgarh

India's states are critical to achieving national clean energy commitments. This report maps how the Union and state governments have supported different types of energy in Chhattisgarh from fiscal years (FY) 2020 to 2024. By mapping fossil and clean energy support from the Union and state governments, the report aims to improve transparency, strengthen accountability, and guide a responsible shift toward clean energy and economic diversification for Chhattisgarh.

November 6, 2025
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Key Findings

  • The total support (INR 12,648 crore) came in the form of subsidies, while INR 4,024 crore was invested by public sector undertakings. Subsidies for coal—almost all from the Union government—have increased annually since FY 2020, and in FY 2024, they made up 26% of all quantified energy subsidies.

  • Sixty-two percent of all quantified energy subsidies are for electricity transmission and distribution, and low-priced electricity makes up ~90% of this. Chhattisgarh state government provides 98% of these electricity subsidies.

  • Clean energy subsidies constitute only 8% of total quantified subsidies in Chhattisgarh—most of this is from the state government. Union government support to renewables, much of which flows to large grid-scale projects, has been missing because of the low development of such projects in the state.

  • Energy-related revenues in Chhattisgarh reached INR 22,532 crore—22% of the state’s total revenues. Seventy-eight percent of the energy-related revenues came from fossil fuels—38% from coal and 40% from oil and gas—leaving the state heavily exposed to shifts in future energy landscape.

This report measures government support by quantifying energy subsidies, public sector undertakings for fossil fuels, electricity transmission and distribution, renewable energy, biofuels, and electric vehicles between FY 2020 and FY 2024. The report also quantifies the government's energy revenues in Chhattisgarh from different types of energy. This is the first time a report has quantified the combined value of Union and state government support in Chhattisgarh's energy sector. 

We identified four times more subsidies for coal, oil, and gas than for clean energy. Overall, fossil fuel subsidies have doubled since FY 2020. 

Key recommendations include the following:

  • The Chhattisgarh Chief Minister's Office has prepared a vision document that sets a target of 66% of renewable energy in the state's energy mix by 2047. The state's vision document outlines a renewable-led generation plan but can do more by establishing clear state-level net-zero targets that help transition government support from fossil to clean energy.
  • Better targeting of electricity subsidies to low-income households can help control growing fiscal expenditure. The savings can be redirected into rooftop solar, solar pumps, small-scale wind, and repurposed thermal assets. 
  • Diversify revenue beyond coal, oil, and gas by enhancing production of minerals like iron ore, bauxite, and limestone, and align industrial development with the state’s long-term decarbonization goals. 
  • Establish a state-led coordination committee with key departments and stakeholders to design social support mechanisms for coal-dependent workers and communities. Collaborating with the Ministry of Coal and coal firm Southeastern Coalfields Limited to diversify operations and create alternative employment can drive just transition planning in the state. 

Participating experts

Anas Rahman

Senior Policy Advisor

Shruti Sharma

Lead, Affordable Energy

Godwin Paul Chandra Sekar

Policy Advisor

Report details

Topic
Climate Change Mitigation
Energy
Just Transition
Subsidies
Region
India
Project
Budgeting for India’s Energy Transition
Publisher
IISD
Copyright
IISD, 2025
Workshop

Stakeholder Convening to Accelerate Electric Vehicle and Battery Manufacturing in Telangana

July 28, 2025 10:00 am - 5:30 pm IST

The Marvel, T-Hub, Hyderabad Knowledge City, Serilingampally, Hyderabad

(Open to public)

The Telangana electric vehicle (EV) and battery convening brought together leading experts, industry leaders, investors, and policy-makers from battery and EV production, recycling, and circular economy domains to co-develop actionable strategies for strengthening Telangana’s battery manufacturing and circularity ecosystem.

The event addressed key challenges, exchanged best practices, and explored strategic opportunities around policy and regulatory gaps, data challenges, cost and incentive structures, potential supply chain and logistics inconsistencies, extended producer responsibility compliance, skill development, and global best practices. These discussions aimed to spotlight the Government of Telangana’s forward-looking policy measures and attract further investments in the state.

Some of the key takeaways: 

  1. There is an urgent need for policy certainty over the next decade to attract long-term patient capital in the EV sector.
  2. Strategic trade agreements can help localize India’s EV/battery supply chain and demand aggregation for scalability.
  3. There is a need to strengthen extended producer responsibility and scale up pilots using Battery Aadhaar to ensure responsible battery disposal.

Discussing the event, Swasti Raizada, senior policy advisor with IISD, says, “IISD is pleased to support the Government of Telangana in advancing its policy framework for localizing battery and EV manufacturing. The state's pioneering leadership is laying the groundwork for a vertically integrated EV value chain—crucial for boosting domestic manufacturing, attracting long-term investments, and enhancing supply chain resilience for India.”

The event was organized by the International Institute for Sustainable Development in partnership with the Government of Telangana, Telangana Mobility Valley, Battery 360 Alliance, and India Energy Storage Alliance.

Workshop details

Topic
Energy
Circular Economy
Region
India
Impact area
Climate
Sustainable Economies
Insight

Micro-Agrivoltaics: Hiding in plain sight

As India explores the promise of agrivoltaics, small and marginal farmers are cultivating crops beneath solar panels without formal support or mainstream recognition.

 

Researchers at the International Water Management Institute-Tata Water Policy Program (ITP) argue that this under-recognized practice of ‘Micro-Agrivoltaics” is a powerful opportunity to scale clean energy while boosting agricultural productivity and deserves greater attention and systematic study. 

June 17, 2025

There is growing interest in expanding and mainstreaming agrivoltaics in India. The Ministry of New and Renewable Energy (MNRE) recently helped organize 100 farmer-awareness workshops around the country’s flagship PM-KUSUM scheme, where the potential for agrivoltaics was among the key themes of discussion. The Indian Agricultural Research Institute (IARI) has now launched a Centre of Excellence for research into agrivoltaics and related themes. Meanwhile, the National Academy of Agricultural Sciences (NAAS) convened a brainstorming session and published a policy paper,  Agrivoltaics for Sustainable Crop and Energy Production, urging the Ministry of Agriculture and Farmers’ Welfare (MoAFW) and MNRE to craft a joint National Agrivoltaics Policy.

Innovative research and on-ground pilots are multiplying, showcasing promising business models that can be scaled. At the same time, private sector and renewable energy developers are also signaling strong interest in expanding agrivoltaics deployment.

Taken together, these developments underscore the significant enthusiasm surrounding agrivoltaics as a pathway to help scale solar deployment while supporting India’s farmers and agriculture sector. However, one dimension remains largely overlooked by key stakeholders and policymakers: “micro-agrivoltaics”.

The biggest appeal of agrivoltaics is dual land use—for solar energy generation and agriculture. In fact, some have argued that under certain conditions, and for certain crops, agrivoltaics can improve agricultural incomes. Small and marginal farmers, used to squeezing livelihoods from stamp-sized land parcels through intensive irrigation and multiple cropping, intuitively grasp this benefit. Many have installed small solar plants to run irrigation pumps and continued farming beneath the panels. These ‘live agrivoltaics pilots’ have largely remained unstudied. In this article, we highlight key findings from a small telephonic survey undertaken by ITP in north Bihar.

Over the past decade, solar irrigation has grown substantially—from less than 5,000 solar pumps in 2010-11 to more than 800,000 by 2024-25. Most of them have deployed (relatively) small capacity solar panels on farmers’ fields—primarily with the objective of powering irrigation. While the dominant practice is to fence off the land parcels where solar panels are deployed, some farmers have chosen to deviate from the norm. During our field visits in north Bihar, we found several farmers extending their cultivation underneath solar panels. Intrigued by this practice, we decided to initiate a quick assessment.

In 2024, ITP commissioned a phone survey of 162 farmers who were irrigating their crops using solar pumps. Of the farmers interviewed, 70 reported cultivating some crops underneath solar panels. The practice of cropping under solar panels was driven by small land holdings and extreme land fragmentation. The crops ranged across tomatoes, brinjal, chilli, ginger, carrot, cucumber, garlic, peas, lady finger, turmeric, cauliflower, and other leafy vegetables. While some reported doing this for just over a year, several had been practicing this for 3 years. One interviewed farmer shared 8 years of experience cultivating crops under solar panels. Findings show:

  • Only 10% of the farmers practicing ‘micro-agrivoltaics’ believed that cultivating crops underneath solar panels would hinder crop growth.
  • Except in the case of cherry tomatoes, farmers did not report any change in the density of crop cultivation underneath solar panels vis-à-vis open field cultivation.
  • About a third of the interviewed farmers thought that crops grown underneath solar panels require less irrigation and that the shading improved soil moisture retention.
  • The best yield improvements were reported for chilli, ginger, turmeric, tomatoes, brinjal, and leafy vegetables.
  • 25% of the micro-agrivoltaics farmers reported no change in crop yield under solar panels; 35% reported marginally higher yields; while 40% reported significantly higher yields under solar panels (>20% higher).

India’s roughly 25 million minor irrigation structures represent a large irrigation economy dominated by pumps in the hands of millions of small farmers. Collectively, solarizing the minor irrigation economy offers a potential for deploying about 200 GWp of solar—and if the Bihar survey is any indication, these could support hundreds of MWp of micro-agrivoltaics.

Although our sample was small, the survey was semi-structured, and sampling was based exclusively on convenience, the results point to the need for a more systematic investigation of the impact and potential of micro-agrivoltaics. ITP intends to build on this work in 2025 through a more systematic study of this promising 'grassroot innovation’ that has been hiding in plain sight.

Insight details

Topic
Energy
Food and Agriculture
Climate Change Mitigation
Region
India
Project
Solarizing Irrigation in India
Impact area
Climate
Sustainable Economies
Deep Dive

Smarter, Stronger, Scalable: The case for digital innovation in distributed renewable energy

Decentralized renewable energy (DRE) projects often launch with great fanfare, but the real challenge isn’t turning the lights on—it’s keeping them on. To scale what works, we need a smarter approach: predictive maintenance, real-time data, and digital innovation.

June 5, 2025

Snapshot

DRE has long promised to light up underserved communities, fuel local development, and close the energy access gap across the Global South. However, while many pilot projects have delivered short-term success, too many have faltered in the long run—not because of poor technology, but because of a critical gap in operations and maintenance. Traditional models have failed to meet the complex realities of rural and remote systems. 

This piece breaks down why so many DRE systems stall, and what a truly scalable solution looks like: predictive maintenance, digital integration, and a shift from reactive fixes to intelligent, connected systems that keep the power on.

What’s Holding DRE Back 

DRE’s promise has always been more than just clean electricity—it has represented hope. A hope to light up the remotest corners of the world, to enable children to study after sunset, to power irrigation pumps and health care facilities where the grid never quite made it, and to drive local economies through reliable, decentralized energy access.

In 2014, Dharnai in Bihar became a celebrated example as a "model solar village," powering homes, schools, and livelihoods through a dedicated 100kW solar microgrid.

While the microgrid significantly improved energy access in its initial phase, it started facing significant operational challenges over time. 

Studies documented performance variability in power generation, influenced by practical issues like inconsistent maintenance practices, shading, and improper panel orientation. The absence of integrated real-time monitoring systems and data analytics compounded these problems, making it difficult to proactively identify and address maintenance and performance-related issues. 

Solar panels in India

In 2013, Lakshmipura-Jharla, Rajasthan, a solar microgrid was established to provide dedicated energy services to rural households. While the microgrid improved energy access, studies revealed performance variability in power generation influenced by factors such as shading, panel orientation, and maintenance practices. The absence of continuous performance monitoring and data analytics made it challenging to identify and address these issues proactively, emphasizing the importance of integrating real-time monitoring systems to maintain consistent energy output.

Similarly, in 2015, Barapitha became Odisha’s first fully solar-powered village, and its success made headlines. In Maligaon, deep in Odisha’s Kalahandi district, and Lehni II in Uttar Pradesh, solar microgrids not only electrified homes but also introduced community governance mechanisms like village development committees to manage and maintain the systems. These were not just infrastructure projects. They were symbols of decentralized empowerment.

But then, one by one, these systems started failing. These are not isolated incidents—they are quite common, particularly in rural areas.

Time and again, DRE projects launch with great fanfare: high expectations, community celebrations, and media coverage. But after the ribbon-cutting fades, a predictable arc unfolds: maintenance lapses, minor technical glitches snowball into major faults, spare parts remain unavailable, and skilled technicians are too far away. Gradually, the once-bright lights go out.

Across the Global South, hundreds of DRE systems tell the same tale: excellent at the beginning, but lacking the operational resilience needed for long-term sustainability. A 2018 study by the International Renewable Energy Agency emphasized that without strong post-installation support and system upkeep, even the most promising DRE interventions risk falling into disrepair. The core issue? Operations and maintenance.

This has long been the Achilles’ heel of DRE systems, especially in the rural context, where road access is poor, skilled labour is scarce, and costs must be kept low. Traditional models, whether reactive (fix it when it breaks) or preventive (check it on a schedule regardless of need), have failed to serve the dynamic and remote nature of rural DRE. 

Further, the challenge of DRE today extends beyond just keeping systems running. It is also about scaling them up and integrating them meaningfully into the broader electricity ecosystem. As DRE transitions from pilot projects to mainstream infrastructure, we are faced with a new layer of complexity: once these thousands of weather-dependent DRE sources get connected to the grid, how do we forecast their generation? How do we coordinate that with energy demand and supply contracts (such as long-term power purchase agreements)? And how do we ensure the grid remains stable while doing so?

Scaling DRE demands more than duplication. It also requires orchestration. That means employing predictive models and digital tools to simulate generation variability, optimize system configurations, and make real-time decisions about when to draw power from the grid and when to feed into it. Without this layer of intelligence, large-scale DRE risks becoming a patchwork of uncoordinated systems, straining both local operations and national grid reliability.

This is where the future of DRE must pivot.

To sustain and scale up DRE systems, we must break from conventional maintenance paradigms and move toward a system that is intelligent by design.

It is no longer sufficient to build and hand over the systems. Instead, we need innovative, technology-driven solutions that anticipate failures before they happen, enable remote diagnostics, simulate system behaviour, and support communities with real-time data and insights. This is where digital technologies like Internet of Things (IoT)-based remote monitoring, artificial intelligence (AI)-driven predictive maintenance, and digital twins not only help keep the lights on but also ensure that DRE becomes a flexible and resilient pillar of future energy systems.

The Digital Shift: From feasibility to frontier

The research and implementation of DRE have increasingly leveraged technology to optimize system performance and enhance energy access solutions.

In the 1980s and 1990s, pilot projects focused on proving that DRE systems could work and analyzing their socio-economic viability for rural electrification. Over time, this evolved into using software to model and simulate renewable energy systems. Tools like HOMER Energy allowed planners to design optimal system configurations using local resource and demand data, simulating thousands of scenarios to identify the most cost-effective mix. These tools marked the beginning of digitalization in DRE.

But that was just the start. The field is now entering a new phase, where we don’t just model feasibility but use digital tools to manage real-time operations, predict faults, and support integration with broader electricity markets.

Bridging the Gap Between Innovation and Adoption

While the potential of integrating technology into DRE systems is immense, there could be various potential challenges as well. Some of them are highlighted below:

  • The high costs of technology adoption could deter small-scale developers. Even if the developer tries to pass on the cost to the end consumers, the resultant tariff of such systems will become high, making it lose its cost competitiveness against subsidized electricity rates, as is the case in most developing countries.
  • Connectivity issues in remote areas may hinder real-time data transmission and monitoring.
  • Limited digital literacy among the operators and technicians responsible for managing/maintaining these systems could further complicate the operations, and in case of an emergency, might add to the layer of existing challenges.
  • Data silos and lack of knowledge sharing remain an issue. The DRE pilot projects are often limited to specific locations. However, sometimes due to concerns over data privacy and a lack of open collaboration, insights and data from such interventions are inaccessible for broader use. This limitation hampers their full potential, as the valuable learnings from such projects could inform and enhance future interventions.
  • Other factors include the following: These digital innovations also face market risks, as limited demand for emerging, nascent products, due to a small market footprint, lack of awareness among developers, or the absence of supportive policies, can lead to their decline.

These roadblocks make a compelling case for broader policy support and capacity building.

Enabling the Future: Policy, finance, and capacity building

To unlock the full potential of digital DRE systems, we need a multi-pronged strategy:

  • Commercial viability of technology integration must be built into every stage, from planning to operations. Innovative business models, blended finance, and public–private partnerships can help make digitized DRE both impactful and investable.
  • Governments should scale up digital infrastructure in rural areas. Governments should continue to incentivize the expansion of rural digital infrastructure, including last-mile Internet connectivity through complementary technologies, such as satellite broadband and local manufacturing of IoT components.
  • Training and capacity building at the local level, through digital literacy programs and technician training, can ensure long-term community ownership.
  • Developing regulatory frameworks to break silos between different DRE interventions would enable interoperability between such digital solutions, and also ensure that the data from all these interventions gets effectively utilized for improvements in the sector.
  • Policy incentives and risk guarantees can reduce entry barriers for developers and communities to adopt intelligent DRE systems.

Frontier Technologies 

Emerging technologies like blockchain-enabled peer-to-peer trading and smart IoT-based demand response tools have been constantly pushing the boundaries of possibilities. Pilot projects in Karnataka and Uttar Pradesh are exploring blockchain platforms for community energy exchange, demonstrating a glimpse into decentralized, participatory electricity markets. In fact, Uttar Pradesh became the first state in India to launch a pilot project for peer-to-peer trading of rooftop solar power.

However, technology itself is not the silver bullet to scale the uptake of DRE.

True success for DRE can be achieved with the right ecosystem, one that blends policy, financing, and technology. India can set a global example in how to digitize and democratize energy systems for both resilience and inclusion.

 

The Road Ahead

Previous DRE interventions have shown that the challenge is not in installing DRE systems. The challenge lies in keeping the lights on and scaling these systems smartly, year after year, storm after storm, user after user. And that will only happen when DRE is not just distributed, but predictive, integrated, and intelligent. 

The next leap in energy access will not just be solar panels and batteries. It will be smart algorithms, real-time data, and interconnected ecosystems. We should be ready to power that future.

 

The Snapshot section in this article was developed with the assistance of Microsoft Copilot on May 26, 2025, to summarize the article’s key points. All AI-supported content was carefully reviewed and approved by the article’s original authors.

Deep Dive details

Topic
Energy
Climate Change Mitigation
Region
India
Impact area
Climate
Sustainable Economies
Newsletter
Solar Agri Bulletin header and opening paragraph

Solar Agri Bulletin: 2025 budget special edition

Bimonthly updates on solarizing agricultural demand

In this special edition on annual budgets, we delve into the growing emphasis on solarizing agricultural demand in India's Union and state budgets, covering allocations in Bihar, Chhattisgarh, Gujarat, Karnataka, Jharkhand, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Telangana, and Uttar Pradesh.

March 26, 2025
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We are delighted to present the fourth edition of the Solar Agri Bulletin. This bimonthly publication by the Advisory Group on Solarizing Agricultural Power Demand serves as a gateway to key developments in India’s rapidly evolving solar power agricultural sector.

In this special edition on annual budgets, we delve into the growing emphasis on solarizing agricultural demand in the Union and state budgets, covering allocations in Bihar, Chhattisgarh, Gujarat, Karnataka, Jharkhand, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Telangana, and Uttar Pradesh.

We also explore the new policy initiatives in the states of Assam and Madhya Pradesh aimed at accelerating renewable energy adoption, including decentralized solar. Key tender updates from Gujarat, Madhya Pradesh, and Rajasthan also offer valuable insights into the evolving solar landscape.

At the national level, this issue of the Solar Agri Bulletin highlights details of fund disbursement under PM KUSUM, updates on India’s expanding domestic module manufacturing capacity, and recent regulatory amendments to tariff-based competitive bidding guidelines for grid-connected solar projects.

This edition also features an expert column by Mallik E V, a Senior Associate at CSTEP, on leveraging multi-criteria decision making for land suitability assessment in solar deployment.

Guest Column

Incorporating Multi-Criteria Decision Making in Geospatial Analysis Can Elevate Land-Suitability Assessment for Solar Deployment

Land constraint is a key challenge in effectively implementing Component-A and Component-C—Feeder-Level Solarization of the PM KUSUM scheme. In this edition's guest column, Mallik E V explains that integrating multi-criteria decision making with geographic information systems can streamline land identification, optimize site selection, and enhance policy-driven solar deployment.

Mallik E V is a Senior Associate, Energy and Power, Center for Study of Science, Technology and Policy (CSTEP).

Through its Components A and C (Feeder-Level Solarization [FLS]), the PM KUSUM scheme aims to promote decentralized solar energy to meet agricultural power demand during the daytime, thereby reducing reliance on conventional power sources. However, the effective implementation of this initiative faces significant hurdles due to land availability constraints, particularly in states with intensive agricultural activity and limited non-arable land.

The process of identifying and aggregating suitable land parcels for solar deployment has proven to be highly complex, marred by multiple issues, such as land-use conflicts, ownership disputes, policy-related hurdles, and potential environmental damage. Multi-criteria decision making (MCDM) can help address these challenges.

MCDM is a method of evaluating and ranking options in situations where several factors need to be considered simultaneously. It offers a structured and data-driven strategy for evaluating and prioritizing land parcels on the basis of multiple criteria. By integrating geographic information systems (GIS) with MCDM techniques, decision-makers can systematically assess land suitability while considering environmental, technical, economic, and regulatory factors.

For land-suitability assessment, the MCDM technique considers factors like land classification, proximity to substations, road accessibility, climatic aspects, and environmental constraints, assigning relative importance (weights) to these parameters. This can promote the efficient use of available land by prioritizing low-conflict areas, such as barren and degraded land, and excluding the land near forests and ecologically sensitive zones. As a result, it helps to prevent conflicts that might arise in attempting optimal land utilization for solar energy projects. MCDM also enhances grid integration and accessibility by ranking land parcels on the basis of their proximity to substations and road infrastructure, thereby reducing transmission losses and grid expansion costs.

MCDM fosters collaborative decision making by incorporating inputs from key stakeholders, such as state nodal agencies, distribution companies (discoms), landowners, and developers, and provides data-based insights for policy-makers. The technique can be enhanced to classify areas around substations as buffer zones, allowing for systematic land classification and leasing regulations set by relevant state revenue departments. By mapping survey numbers within these buffer areas, the process of land identification can be streamlined. This would also help the state agencies to establish ceiling rates for leasing, ensuring that farmers and landowners receive fair compensation and are not misled by developers. Such a structured approach would help simplify ownership verification and leasing terms, reducing legal complexities and facilitating a smoother deployment of solar systems/plants.

Given the unique geographical and policy landscape of each state, a state-specific GIS-based land identification platform that incorporates MCDM techniques can streamline decision making, enabling efficient land aggregation, reducing acquisition challenges, and accelerating the development and implementation of solar projects. Combining GIS and MCDM can be an effective strategy and can aid in meeting India’s clean energy targets sustainably and equitably.

Sectoral Developments

State-Level Updates

State Budgets

  1. The Bihar government announced in its state budget that it has been providing subsidized power supply to agricultural consumers at a rate of INR 0.55/unit, with the total number of agricultural consumers reaching 5.42 lakh. Under the Jal Jeevan Hariyali Yojana scheme, launched in 2019, Bihar’s state government aims to supply dedicated electricity for agricultural activities through specialized feeders. Now in the third phase, the state is targeting 1,200 MW for feeder solarization. Previously, under Phase 1, tenders were issued for the installation of 800 MW of solar plants to power 1,235 feeders across 843 substations, while under Phase 2, tenders were issued for the solarization of 1,650 MW capacity across 1,121 substations.
  2. Chhattisgarh’s budget has allocated INR 3,500 crore to provide free electricity for agricultural pumps with a capacity of up to 5 HP, aiming to ease the financial burdens on farmers. Additionally, INR 50 crore is set aside for the electrification of agricultural pumps.
  3. Gujarat’s budget for 2025/2026 has set a renewable energy target of over 100 GW by 2030 to enhance energy security. INR 103 crore is designated for stand-alone off-grid solar agricultural pumps under the PM KUSUM Yojana scheme, while INR 2,175 crore is allocated for the Kisan Suryoday Yojana scheme to provide daytime electricity to farmers. Additionally, INR 987 crore is earmarked for new agricultural electricity connections in tribal and other areas. The Sagarkhedu Sarvangi Vikas Yojana scheme, which focuses on development in coastal Gujarat, will receive INR 132 crore for new agricultural electricity connections, among other initiatives.
  4. Karnataka’s state budget has increased its financial support to 50% for PM KUSUM Component-B, reducing the farmer’s contribution to 20%. Approval for 40,000 solar pumps has been granted under Component-B, with the state government contributing INR 752 crore. Additionally, INR 16,021 crore has been allocated for 33.84 lakh irrigation pumps. The state, setting its own timeline for PM KUSUM Component-C implementation, has 1,192 MW in progress under Phase II, while Phase I targeted 1,302 MW, completing 21 MW by December 2024. Further, to encourage renewable energy adoption in the state, agricultural land conversion will be exempt for renewable energy installations.
  5. In this year’s budget, Jharkhand announced its plans to install 10,000 solar pumps under Component-B of the PM KUSUM scheme, for which INR 150 crore has been allotted.
  6. Madhya Pradesh's budget allocated INR 447 crore for this fiscal year to the Pradhan Mantri Krishak Mitra Surya Yojana scheme, which aims to replace existing agricultural pump connections with solar pumps. Under this new scheme, 30% of the pump cost will be covered by the Central government as central financial assistance, while farmers will bear 5%–10% as margin money. The remaining 60%–65% of the total cost will be the farmer's loan component, which will be borne by the nodal agency, MPUVNL, for which the budget has been allotted.
  7. Maharashtra’s state budget made several announcements to support farmers and solarize the agricultural demand. Under the Magel Tyala Solar Power Pump scheme, INR 15,000 crore is allotted to supply solar pumps to 8.5 lakh farmers. An INR 14,761 crore subsidy has been allotted to Mukhya Mantri Baliraja Vij Savlat Yojana, providing free electricity to agricultural pumps up to 7.5 HP, benefiting 44.06 lakh farmers. In addition, an INR 1,594 crore pilot solar project will be implemented in Mhaisal, Sangli district, set to benefit around 75,000 farmer families in Sangli and Solapur districts. An INR 4,200 crore initiative was also announced to solarize all government irrigation schemes, including Janai-Shirsai and Purandar lift schemes.
  8. In its first "green budget," Rajasthan has earmarked INR 400.16 crore for PM KUSUM Component-B to install 50,000 solar pumps. Additionally, INR 559.63 crore has been allocated from the state fund for solar-powered minor irrigation projects.
  9. Tamil Nadu, in its exclusive agriculture budget, announced the Chief Minister’s Scheme of Solar Powered Pumpsets to boost farmers’ income and promote renewable energy in irrigation. Under this scheme, a budget outlay of INR 24 crore has been allocated in 2025/2026 to install off-grid standalone solar pump sets, which will benefit 1,000 farmers devoid of electricity connection, offering a 70% subsidy for small, marginal, Scheduled Caste, and Scheduled Tribe farmers and a 60% subsidy to other farmers.
  10. Telangana’s budget allocated INR 12,600 crore for its new scheme, Indira Giri Jalavikasam for Tribal Farmers, which provides solar-powered pump sets to cultivate podu lands and benefits 2.1 lakh farmers. The budget also announced that farmers using drip irrigation with solar power will be prioritized for incentive subsidies to promote sustainable and cost-effective farming.
  11. Uttar Pradesh, in its state budget, announced INR 509 crore for PM KUSUM for the upcoming fiscal year. The state has also completed 3,817 agricultural feeders out of the target of 4,680 under its feeder segregation plan.

State Tenders

  1. In February 2025, Madhya Pradesh Urja Vikas Nigam Limited (MPUVNL) issued a tender for the solarization of agricultural feeders totalling 1,500 MW in capacity through tariff-based competitive bidding at various locations across the state under PM KUSUM  Component-C (FLS). A unique aspect of this tender is the reactive power compensation regime, which will provide incentives or disincentives to successful bidders to support the grid in reactive power management.
  2. MPUVNL has invited expressions of interest from scheduled commercial banks to submit their proposals for providing loans to individual farmers under Component-B of the PM KUSUM scheme for the installation of off-grid solar pumps. The tender targets the installation of 52,000 solar pumps, and the banks selected after this expression of interest will be impanelled for the distribution of loans for pump installations.
  3. The Rajasthan Electricity Regulatory Commission has approved the pre-fixed levelized tariff of INR 3.04/unit for the newly allocated additional capacity of 5,000 MW by the Ministry of New and Renewable Energy (MNRE) to Rajasthan under Component-A of the PM KUSUM scheme, taking the state’s allocation under this component to 6,500 MW. The implementing agency, Rajasthan Rajya Vidyut Utpadan Nigam Limited (RUVNL), has distributed this additional capacity among the three discoms—Jaipur Vidyut Vitran Nigam Limited (JVVNL), Jodhpur Vidyut Vitran Nigam Limited (JdVVNL), and Ajmer Vidyut Vitran Nigam Limited (AVVNL)—at 1,500 MW, 2,500 MW, and 1,000 MW, respectively.
  4. The power discoms in Rajasthan have recently issued multiple tenders under Component-A of the PM KUSUM scheme at a pre-fixed levelized tariff of INR 3.04/unit. The tender details are given below:
  5. The Gujarat Electricity Regulatory Commission (GERC) approved the adoption of levelized tariffs discovered through competitive bidding by the state power distribution companies for solar projects under Component-C (FLS) of PM KUSUM. The details of the orders are as follows:
    • Order dated January 27, 2025, a levelized tariff of INR 3.00/unit, discovered by Dakshin Gujarat Vij Company Limited (DGVCL), was approved for three solar power plants aggregating to 3.0 MW capacity.
    • Order dated January 27, 2025, a levelized tariff of INR 3.00/unit, discovered by Madhya Gujarat Vij Company Limited (MGVCL), was approved for two solar power projects aggregating to 2.0 MW capacity.

State Policies

  1. The Government of Assam, in February 2025, notified the Integrated Clean Energy Policy 2025, targeting the addition of 11,700 MW in renewable energy capacity by March 2030. The policy encourages distributed generation through feeder and pump solarization, among others. The policy will support the development of solar projects ranging from 0.5 MW to 5 MW via competitive bidding and will facilitate the solarization of existing grid-connected agricultural pumps. Decentralized solar power projects can be set up on uncultivable land by farmers, independently or with developers. The state government will issue schemes/programs to promote decentralized solar generation within the state.
  2. Madhya Pradesh notified the Madhya Pradesh Renewable Energy Policy 2025, which aims to achieve a 30% share in the energy mix by 2027 and 50% by 2030. Effective until 2030, the policy emphasizes greening substations by supplying renewable energy to all associated feeders. Additionally, virtual greening will be implemented by generating renewable energy equivalent to the total demand of feeders at designated green substations.

State Investment Summits

  1. Chhattisgarh Energy Investors Summit 2025 – The state government in Chhattisgarh organized the summit in Raipur on March 10, attracting investments worth INR 301,086 crore. Among other announcements, 675 MW of solar power will be installed at a cost of INR 4,100 crore under the PM KUSUM scheme, along with the installation of 20,000 solar pumps for farmers.
  2. Madhya Pradesh Global Investors’ Summit, 2025 – MPUVNL launched the Standard Operating Procedures for Components A & C (FLS) at the 8th Invest Madhya Pradesh – Global Investors Summit 2025, organized by the state government in Bhopal on February 24 and 25, marking a significant stride toward the state’s ambitious goal of 10 GW in decentralized solar under PM KUSUM.

National Updates

  1. The Union Budget 2025/2026 identified agriculture as one of the key pillars in India's journey toward Viksit Bharat. The budget has allocated INR 2,600 crore to the PM KUSUM scheme in the current fiscal year, reflecting a 26% increase from the previous year's actual expenditure of INR 2,525 crore. Notably, the actual expenditure in the previous fiscal year surpassed the originally allotted INR 1,996 crore.
  2. Responding to a question in the Rajya Sabha, the Honourable Minister of State for New and Renewable Energy of India, Shripad Naik, shared details of funds released under the PM KUSUM scheme across states. The funds under the scheme are disbursed in accordance with the scheme guidelines, based on the installation progress reported by the state implementing agencies. Maharashtra was the top recipient in the fiscal year 2024/2025, receiving INR 1,154 crore—accounting for 58% of the total funds released. The state witnessed a remarkable 250% increase in allocation from INR 330 crore in 2023/2024 to INR 1,154 crore in 2024/2025, with a cumulative INR 1,741 crore disbursed over the past 3 years. Haryana, Rajasthan, and Uttar Pradesh followed as the next-highest recipients over the last 3 years, while Gujarat, Jharkhand, Karnataka, and Rajasthan saw increased allocations in 2024/2025 compared to the previous fiscal year.
      
  1. According to the updated Approved List of Models and Manufacturers (ALMM) released by the MNRE on February 17, 2025, India’s module manufacturing capacity stands at 67.18 GW, a decrease of 200 MW from the previous ALMM list. The latest ALMM lists 92 module manufacturers, as the registration of some module manufacturers has expired.
  2. The Ministry of Power has made amendments to the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects. The notified changes require the developers to maintain the committed minimum capacity utilization factor. Failing to do so for 2 consecutive years will be considered a default. Additionally, a new clause mandates that the signing of the power purchase agreement and power sale agreement, if applicable, should be completed within 30 days of the Letter of Award (LoA), with a maximum extension of up to 12 months, beyond which the LoA will be cancelled.

Publications

From the Archives

Solar Irrigation Pump Survey

Commissioned by: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

For effective implementation of the PM KUSUM scheme, it is vital for policy-makers to assess the performance of solar irrigation pumps (SIPs) and identify best practices.

A study commissioned by GIZ examined the state solar water pump schemes preceding the PM KUSUM Scheme (2015/2016 and 2016/2017), evaluating the operational conditions, utilization, impact, and scheme processes for 955 SIP assets installed across the states of Rajasthan, Uttar Pradesh, Tamil Nadu, and Odisha. The study indicated that Odisha had the lowest solar pump utilization at 39 days among the four surveyed states. In certain cases, though the overall impact of SIP adoption has been positive, gaps in application approval, installation, and after-sales service delays have hindered effective deployment.

A brief summarizing the key findings was published in December 2023 and may be accessed here.

Newsletter details

Topic
Energy
Climate Change Mitigation
Food and Agriculture
Region
India
Impact area
Climate
Sustainable Economies
Publisher
IISD
Copyright
IISD, 2025

Solarizing Irrigation in India

Revolutionizing India’s agricultural landscape through reliable solar power.

Powering India’s agriculture

India’s agricultural sector is the country’s third-largest consumer of electricity. State governments often subsidize electricity for farmers, but these subsidies place immense financial strain on the electricity distribution companies (discoms) and state governments. To manage their losses, discoms restrict the hours of power supply to farmers, resulting in unreliable electricity access. By shifting agricultural power demand to the daytime through solar-powered irrigation, India can harness a dual benefit of decarbonizing its agricultural sector while improving the efficiency and reliability of electricity distribution. 

Solar-powered irrigation can help in three ways:

  1. It provides reliable and affordable power to farmers, reducing dependencies on erratic supply and costlier diesel alternatives, therefore enhancing farmers’ incomes and well-being.
  2. Transitioning away from heavily subsidized electricity reduces financial pressure on discoms.
  3. Solar irrigation advances India’s clean energy goals, lowering air pollution and greenhouse gas emissions.

Solarizing agricultural demand can foster more resilient and sustainable agricultural and electricity sectors.

Accelerating solar irrigation through PM-KUSUM policy support

The Government of India’s Kisan Urja Suraksha evam Utthaan Mahaabhiyan (KUSUM) scheme is at the forefront of promoting solar irrigation. Under its three components, the scheme seeks to deploy decentralized solar plants (Component A), standalone solar pumps (Component B), and grid-connected agricultural pumps (Component C) on farmer-owned lands.

IISD’s research aims to support state policy-makers in accelerating the implementation of solar irrigation under the PM-KUSUM scheme, providing evidence-based recommendations, needs-based assistance, and practical implementation-focused tools to help states navigate key challenges and maximize the benefits of the transition to solar-powered agriculture.

Collaborating partners

IISD, CSTEP, and CEEW logos

Publications

Micro-Agrivoltaics: Hiding in plain sight

As India explores the promise of agrivoltaics, small and marginal farmers are cultivating crops beneath solar panels without formal support or mainstream recognition.

Insight

June 17, 2025

Implementing Solar Irrigation Sustainably

This guidebook provides recommendations to state policy-makers on how they can implement solar irrigation models, particularly decentralized solar plants for irrigation under the PM-KUSUM scheme, effectively and sustainably.

Report

May 29, 2023

Implementing Solar Irrigation Sustainably

This guidebook provides concrete recommendations for how states in India can implement solar irrigation sustainably—targeting low-income and marginal farmers while avoiding negative impacts on groundwater.

Guide

December 15, 2021

Agrivoltaics in India: Challenges and opportunities for scale-up

A new paper by Canada-based International Institute for Sustainable Development (IISD) and the Consumer Unity and Trust Society International (CUTS) finds promising results in pilot agrivoltaics projects across India. It also identifies key areas of opportunity for agrivoltaics, justifying future research and investment.

IISD in the news

May 26, 2023

Agrivoltaics in India

This background paper assesses the current state of development of agrivoltaics in India and identifies the challenges and opportunities for its commercialization.

Report

May 24, 2023

Mapping Policy for Solar Irrigation Across the Water-Energy-Food (WEF) Nexus in India

How are India's off-grid solar pump policies affecting the water–energy–food nexus? This paper maps out impacts and the key policies that are driving them.

Report

August 6, 2019

Solar Agri Bulletin

This publication serves as a gateway to key solar power developments in India’s agricultural sector. It is brought to you by the Advisory Group on Solarizing Agricultural Power Demand, led by IISD, CEEW, and CSTEP.

Solar Agri Bulletin: 2025 budget special edition

In this special edition on annual budgets, experts delve into the growing emphasis on solarizing agricultural demand in India's Union and state budgets.

Newsletter

March 26, 2025

Solar Agri Bulletin | January 2025

The edition features India's latest state-level tenders and tariff orders on PM-KUSUM as well as updates on the Central Government’s domestic solar manufacturing initiative, and an insightful piece on reactive power compensation in renewable energy integration by Dr. Rachakonda Akshay.

Newsletter

January 22, 2025

Tools

Tariff Analysis and Cost-Benefit Tool for Solarizing Irrigation

This comprehensive tool is designed to support state policy-makers, regulators, and solar developers in calculating market-aligned tariffs for projects to solarize irrigation power demand, including under different components of the PM-KUSUM scheme.

Project team

Christopher-Beaton-2019.jpg

Christopher Beaton

Director, Energy Program, Public Financial Flows

Photo of Shruti Sharma

Shruti Sharma

Lead, Affordable Energy

Photo of Tara Laan.

Tara Laan

Lead, Incentivizing Renewables

Photo of Hrishabh Chandra.

Hrishabh Chandra

Policy Analyst

Photo of Priyami Dutta.

Priyami Dutta

Policy Advisor

Photo of Sunil Mani.

Sunil Mani

Policy Advisor

Photo of Anas Rahman.

Anas Rahman

Senior Policy Advisor

Photo of Ashwitha Thunga

Ashwitha Tunga

Policy Analyst

Project details

Topic
Energy
Region
India
Impact area
Climate
Sustainable Economies
Report
State of the Sector: Critical Energy Transition Minerals for India report cover

State of the Sector: Critical energy transition minerals for India

Volumes I and II

As the world shifts toward sustainable development, securing a reliable supply of critical energy transition materials (CETMs) has never been more vital and essential for renewable energy technologies. Like most progressive nations, India has embarked on several low-carbon technology initiatives and has committed to achieving net-zero emissions by 2070, which necessitates a responsible and reliable value chain of CETMs.

February 11, 2025
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Recommendations

  • Promote domestic mineral exploration and processing through advancing technology, incentivizing mineral exploration in India, extending the Composite Licence regime, increasing the ambit of the National Mineral Exploration Trust, and improving domestic processing capabilities.

  • Promote international co-operation by developing overseas resources, stockpiling minerals, standardizing contracts, and strengthening international diplomacy.

  • Conduct regular assessments of the CETM sector by assessing and updating the critical minerals list, evaluating vulnerabilities, and supporting the development of a critical demand estimation model for India.

  • Encourage recycling and circularity by providing incentives, including the informal sector, establishing Resource Recovery Parks, implementing circular economy and indigenization initiatives, streamlining recycling processes, and advancing recycling technologies.

This report underscores the need for a comprehensive strategy to ensure a reliable supply of CETMs for India's clean energy and low-carbon technology initiatives. It aims to develop a detailed understanding of CETMs, fostering a richer dialogue around this crucial agenda.

The report explores various strategies for securing these essential materials, offering valuable insights into the CETM value chain—from exploration and extraction to processing and recycling. It also addresses the geopolitical, environmental, and social dimensions associated with CETM security. The report’s recommendations aim to inform policy stakeholders and accelerate the creation of resilient and sustainable supply chains for these minerals.

This report is published with permission from the copyright holders.

Report details

Topic
Circular Economy
Climate Change Mitigation
Energy
Mining
Technology and Innovation
Trade
Region
India
Impact area
Climate
Nature
Sustainable Economies
Publisher
CEEW, CSEP, ICRIER, IISD, Shakti
Copyright
Council on Energy, Environment and Water, Centre for Social and Economic Progress, Indian Council for Research on Economic Relations, Indian Institute for Sustainable Development, and Shakti Sustainable Energy Foundation, 2025
Newsletter
Solar Agri Bulletin header and opening paragraph

Solar Agri Bulletin | January 2025

Bi-monthly updates on solarizing agricultural demand

The year 2024 marked significant progress under the PM-KUSUM scheme, showcasing remarkable growth across its components.

 

Solar capacity under Component A nearly doubled, rising from 141.33 MW to 396.98 MW. Under Component B, the installation of off-grid pumps surged from 278,114 to 616,210, while Component C witnessed a dramatic leap in solarized pumps (inclusive of individual pump solarization and feeder level solarization) from 4,594 to 112,456. This rapid expansion underscores the growing enthusiasm of stakeholders, particularly states, toward solarizing agricultural demand and advancing India’s renewable energy goals.

 

Priyami Dutta, Policy Advisor, IISD

January 22, 2025
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We are delighted to present the third edition of the Solar Agri Bulletin. This bi-monthly publication by the Advisory Group on Solarizing Agricultural Power Demand serves as a gateway to key developments in India’s rapidly evolving solar power agricultural sector.

The edition features the latest state-level tenders and tariff orders on PM-KUSUM and updates on the Central Government’s domestic solar manufacturing initiative, including an insightful piece on reactive power compensation in renewable energy integration by Dr. Rachakonda Akshay.

Guest Column

Reactive Power Compensation: Strengthening grids for renewable energy integration

A seasoned power systems engineer, Dr. Akshay specializes in the development of grid-forming inverter technologies and recently conducted an in-depth session on reactive power management using grid-connected solar inverters for the consortium of the International Institute for Sustainable Development (IISD), the Council on Energy, Environment and Water (CEEW), and the Center for Study of Science, Technology and Policy (CSTEP).

Conventional  solar photovoltaic (PV) systems primarily deliver active power to the load and lack reactive power support, creating challenges for the grid, which must consistently meet the reactive power requirements. As the integration of renewable energy sources into distribution networks rises, reactive power management has become crucial. 

Dr. Rachakonda Akshay, Senior Design Engineer for Fimer India Private Limited, explains in this edition's guest column.

AC power system equipment is typically rated based on apparent power, which comprises both active and reactive power. Active power is the component that performs actual work, while reactive power oscillates in the network between source and load with no contribution to work and is stored and released by elements such as line inductance or capacitance. Although loads do not consume reactive power, maintaining it at a certain value in the grid is essential to establishing electromagnetic fields.

An inadequate supply of reactive power can result in voltage sag, i.e., bus voltage dropping below the nominal voltage rating or, in the worst cases, total voltage collapse. Conversely, excess reactive power increases the current in the network, leading to higher copper (I²R) losses and reducing the capacity of electrical equipment to do the active work.

To mitigate these challenges, reactive power is typically compensated locally. Inductive loads such as motors, heaters, and household appliances like refrigerators, air conditioners, washing machines, and electric vehicles inherently consume reactive power from the grid. To address this, distribution substations deploy capacitor banks, while transmission networks use technologies like Flexible Alternating Current Transmission Systems (FACTS) to act as local reactive power compensators. Generators also support reactive power within limits defined by their capability curves.

With the increasing integration of renewable energy sources like solar into power systems at the distribution level, reactive power management has become critical.

Conventional solar PV systems are designed to primarily deliver the active power demand to the load and lack reactive power support. This creates challenges, as the reactive power demand must be consistently delivered by the grid. While active power demand on the grid is reduced due to solar power plant generation, reactive power demand remains the same, potentially causing a voltage drop at the load end. If the voltage falls below the operational threshold of a solar PV system, it will switch off to protect itself, resulting in generation curtailment. This increases the load on the grid, further straining it, as it must stabilize the voltage and instantly supply additional active power to meet the demand.

Advancements in inverter technology have enabled some solar PV systems to provide both active and reactive power within manufacturer-specified limits. Modern inverters can provide reactive power control by various methods, both through fixed and variable reactive power compensation. A fixed reactive power compensation inverter behaves as a fixed capacitor or a fixed reactor, delivering consistent reactive power. Variable compensation dynamically adjusts reactive power based on grid voltage or grid active power levels as a reference, thereby improving grid stability and power flow.

These advanced inverters can also contribute to reactive power support during periods of low active power demand, such as the night hours. During night hours, when solar power is unavailable, the inverter can utilize its full apparent power capacity to maintain stable grid voltage.

The Central Electricity Authority (CEA) reported 28 incidents where inadequate reactive power support from renewable energy generators led to the loss of over 1,000 MW of generation. To address this, the CEA’s Technical Standards for Connectivity to the Grid – 2019, which introduced guidelines for minimum reactive power and Technical Standards for Connectivity to the Grid, Regulations by renewable energy developers – 2023, making it mandatory for renewable energy plants to comply with 2019 standards. Failing to do so can lead to disconnection.

As the rate of integration of decentralized, renewable energy sources rises, reactive power compensation will become increasingly vital in ensuring grid stability. Forward-thinking policy measures driven by robust regulatory frameworks and innovative inverter technologies will be crucial for the strategic implementation of reactive power compensation to support the smooth transition to a resilient renewable energy-powered grid.

Sectoral Developments

State-Level Updates

  1. The Gujarat Electricity Regulatory Commission approved the adoption of levelized tariffs discovered through competitive bidding by state power distribution companies (discoms) for multiple solar projects under Component C – Feeder Level Solarization (FLS) of PM-KUSUM and allowed for the signing of Power Purchase Agreements with the successful bidders. The details of the orders are as follows:
    • Order dated October 29, 2024: levelized tariffs in the range of INR 2.35 to INR 3.00/unit, discovered by Paschim Gujarat Vij Company Limited (PGVCL), were approved for 101 solar power plants aggregating to 259.0 MW of capacity.
    • Order dated December 6, 2024: levelized tariffs in the range of INR 2.74 to INR 2.94/unit, discovered by Uttar Gujarat Vij Company Limited (UGVCL), were approved for 10 solar power projects aggregating to 41.0 MW of capacity.
  2. Punjab State Electricity Regulatory Commission (PSERC), vide order dated December 12, 2024, approved a levelized tariff of INR 2.38/unit for 4 MW for 66 solar projects, aggregating 264 MW at the 11 kV side of substations of Punjab State Power Corporation Limited (PSPCL) under Component C (FLS) of PM-KUSUM. The tariff was discovered through competitive bidding conducted by the Punjab Energy Development Agency with M/S. VP Solar Generation Pvt. Ltd emerging as the lowest (L1) bidder.
  3. The three power distribution companies in Rajasthan issued multiple tenders in October and December 2024 under Component A of the PM-KUSUM scheme for aggregate capacity exceeding 1 GW at a pre-fixed levelized tariff of INR 3.04/unit. The tender details are given below:
  4. In December 2024, Rajasthan also tendered multiple solar projects under Component C (FLS) of the PM-KUSUM scheme. The details of the tenders are given below:
  5. Underscoring its commitment to exceeding the mandated agricultural solarization targets beyond PM-KUSUM, Rajasthan has adopted a novel strategy for solarizing its agricultural feeders. All three discoms have invited applications under a single stage-three envelope bidding process, which implies a single agreement covering the following interlinked activities:
    Distribution Infrastructure Development: Segregation of 11 kV mixed feeders under the Revamped Distribution Sector Scheme on a turnkey basis.
    Decentralized Solar Power Plant Development: Construction of solar plants near 33/11 kV substations under the Hybrid Annuity Model, along with operations and maintenance for 10 years.
    Network Management: Overseeing the 33/11 kV substation and its downstream network for a period of 10 years.

    The three distribution companies have already issued tenders detailing the scope of all activities, which are detailed below:
  6. The Bihar State Power Generation Co. Ltd. (BSPGCL), in September 2024, invited applications through tariff-based competitive bidding at various locations across the state under PM KUSUM scheme Component C (FLS). In addition to the Central Financial Assistance (CFA) available for feeder solarization, the Government of Bihar is providing an additional subsidy of up to INR 45 lakh/MW for these projects.
  7. OREDA Limited, the state nodal agency for Odisha, invited applications from vendors this month for the installation of 10,000 solar pumps under Component B of the PM-KUSUM scheme.
  8. Dakshin Haryana Bijli Vitran Nigam Limited (DHBVN) invited applications in October 2024 for an aggregate capacity of 26.75 MW under Component A of the PM-KUSUM scheme.

National Updates

  1. In a key amendment to the Approved List of Models and Manufacturers (ALMM), the Ministry of New and Renewable Energy (MNRE) introduced ALMM List-II for solar PV cells, effective starting June 1, 2026. This new list addresses the absence of a prior domestic supply framework for solar cells, which was constrained by limited production capacity. With anticipated growth in cell manufacturing capacity, this amendment aims to strengthen India’s domestic solar PV supply chain. Under the updated framework, all solar PV modules used in government-supported projects, net-metering systems, and open-access renewable energy projects must source their cells from ALMM List-II. However, projects already bid before this amendment’s issuance are exempt, even if commissioned after June 2026. Additionally, the amendment also includes provisions for thin-film solar modules.
  2. The MNRE updated List I (Manufacturers and Models of Solar PV Modules) of its ALMM Order-2019 on December 26, 2024. The total enlisted module manufacturing capacity now stands at 63,027 MW.
  3. Telangana released the Telangana Clean and Green Energy Policy, 2025 this month, which will remain active for the next 10 years. The policy outlines Telangana’s ambition to enhance its renewable energy capacity and also lists the incentives proposed by the state for the development of clean energy projects. The state aims to promote solar projects with capacities between 500 kW and 2 MW that are set up by women’s self-help groups (SHG) under this policy, for which the state energy and rural development departments have reached an agreement.
  4. The Valedictory Ceremony of the 100 capacity-building workshops under PM-KUSUM Component A was held on December 7 in Goa. The event marked the culmination of workshops conducted across India and was attended by the Honorable Minister of State for New & Renewable Energy and Power, Shri Shripad Yesso Naik; the Honorable Minister of New & Renewable Energy, Goa, Shri Sudin Dhavalikar; and Joint Secretary, MNRE, Shri Ajay Yadav. These workshops, organized in collaboration with GIZ India, the Indo-German Energy Forum (IGEF-SO), and the Indian Council of Agricultural Research through Krishi Vigyan Kendras, focused on farmers’ outreach and engagement to promote agri-solar solutions. The workshops aimed to raise awareness about the PM-KUSUM scheme and empower farmers with sustainable energy knowledge to contribute to India’s clean energy transition.

Newsletter details

Topic
Energy
Food and Agriculture
Climate Change Mitigation
Region
India
Impact area
Climate
Sustainable Economies
Publisher
IISD
Copyright
IISD, 2025
Report
Green Public Procurement in India report cover showing houses surrounded by tall city buildings.

Green Public Procurement in India

Progress, challenges, and opportunities

This report analyzes the state of green public procurement (GPP) in India, examining progress in the field, persisting challenges, and opportunities for more sustainable government procurement. It analyzes India's legal framework for GPP, highlights case studies and practical tools, and recommends four tangible steps for advancing GPP in the country.

December 19, 2024
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Key Messages

  • Why green procurement? For India, it can mean leveraging 30% of its GDP for sustainable consumption and production, reducing pollution, and meeting global goals like the Paris Agreement.

  • India's journey toward sustainability can benefit from boosting green procurement. With improved policies, skills, tools, and monitoring, GPP can reduce environmental impacts and shape sustainable markets.

India faces the challenge of balancing economic development with environmental sustainability. GPP can be a powerful tool to help address this challenge by leveraging India’s public spending, which accounts for nearly 30% of its GDP. Through green procurement, governments can reduce the environmental impacts of their purchases, while also supporting the market to shift to more sustainable practices.

This report examines the state of GPP in India, where public and private stakeholders have started various initiatives for more sustainable purchasing. Yet, widespread green procurement is still hindered by incomplete policy frameworks, low awareness and skills for GPP, a perception of higher costs for green products, the limited market availability of sustainable alternatives, weak monitoring mechanisms, and fiscal constraints.

Policy-makers, procurers, and civil society organizations in India can address these challenges and advance GPP by implementing four recommendations:

  • strengthen the policy framework, creating a solid legal basis and showing clear commitment to GPP,
  • build awareness and skills for GPP, including on the strategic importance of green procurement and by setting up a competence centre with dedicated trainings,
  • provide easy-to-use GPP tools, such as verified eco-labels and management systems and ready-made environmental criteria, and
  • establish a comprehensive GPP monitoring system, building on a baseline assessment, clear goals, and multi-stakeholder collaboration.

Through these strategic steps, India can leverage its public spending for more sustainable consumption and production, contributing to greener business practices and international commitments under the Paris Agreement and the Sustainable Development Goals.

Participating experts

Ronja Bechauf

Policy Advisor

Liesbeth Casier

Lead, Public Procurement and Sustainable Infrastructure

Report details

Topic
Public Procurement
Sustainable Development Goals
Region
India
Project
Accelerating Decarbonization Through the Power of Procurement
Impact area
Sustainable Economies
Publisher
IISD
Copyright
IISD, 2024
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