In Part 1 of this series, I argued that India’s biggest solar challenge is no longer adding capacity but integrating it into the grid. In Part 2, we explored the tools that make that possible, from storage and flexible demand to EV charging, transmission and time-of-day pricing.
This final part asks a broader question. If India wants solar to supply more than a fifth of its electricity after 2030, what could slow that journey down?
Clearly, India must avoid replacing fossil fuel dependence with clean energy supply-chain dependence. This came up strongly in the WhatsApp group discussion that got this series started some weeks ago. Many people compared India’s trajectory with Pakistan’s recent solar boom.
Pakistan’s solar surge, and issues of energy sovereignty
Reuters has reported that Pakistan imported around 16.6 GW of Chinese solar modules in 2024, up sharply from 3.5 GW in 2022, and that solar contributed more than 25% of electricity in the first four months of 2025.
This is a powerful example of how quickly solar can scale when module prices fall and consumers seek relief from high electricity costs.
But the example also raises a strategic question. If a country replaces dependence on imported fossil fuels with dependence on imported clean energy equipment, has it achieved true energy security?
If we want to avoid this in India, the energy transition must strengthen energy sovereignty.
Government data states that India’s solar PV module manufacturing capacity has risen to around 172 GW. It’s a major industrial achievement, but not full self-reliance.
While India has dramatically expanded module manufacturing, modules are only one layer of the value chain. Long-term resilience will depend on building domestic capabilities across cells, wafers, power electronics, batteries, recycling, storage software and advanced grid technologies.
Industrial policy and energy policy are becoming inseparable. And solar policy must also sync with industrial policy.
DISCOM reforms
Credit ratings provider ICRA Limited has cautioned that India’s solar module manufacturing capacity may be expanding faster than near-term demand. Module capacity is expected to rise from about 109 GW to over 165 GW by March 2027, while annual installations may remain around 45–50 GWdc. The bottleneck, therefore, may be shifting from supply to procurement, contracting and financing.
This brings power distribution companies, or DISCOMs as they’re called in India, to the centre of the transition.
Research, including by Prayas Energy Group, IISD and CSEP, shows why DISCOM reform is difficult: many state DISCOMs remain financially stressed, while tariff design continues to rely on subsidies for agriculture and low-income consumers, partly funded through higher tariffs on commercial and industrial users. CSEP’s Nikhil Tyagi and Rahul Tongia describe this as a deeper tariff-design issue, not merely a technical accounting problem.
Rooftop solar becomes a dangerous tool: adoption by high-paying consumers and their exit from grid-procured power can further impoverish DISCOMs by taking away their main source of revenue. The result? The Centre promotes rooftop solar, consumers are keen to adopt and make savings, developers want faster approvals, but DISCOMs drag their feet.
Customers and developers have routinely complained of slow approvals, net metering delays, capacity restrictions and procedural uncertainty. In Maharashtra, there have been reports of rooftop solar vendors and consumers raising concerns around capacity approvals, automated approval processes and delays, even as DISCOMs defend technical checks and subsidy safeguards.
DISCOM reforms are long overdue in India. And increasingly, they’re central to the country’s renewables adoption.
DISCOMs must evolve from electricity sellers into energy transition platforms. Their business models must reward reliability, balancing, storage integration, data services, demand response, distributed energy orchestration and grid services.
Without this shift, distributed solar will keep facing invisible resistance.
The question of market design
India’s renewable PPAs were initially built for a simpler world: generate renewable power and sell it. But high-renewable systems need a different set of market rules. Contracts must accommodate curtailment, dispatchable renewable power, hybrid solar-wind-storage projects, ancillary services, balancing markets and stronger payment security.
This is where India’s corporate renewable ecosystem becomes an advantage.
India is already one of the few large markets where companies have multiple pathways to renewable energy: direct PPAs, open access, virtual PPAs, green tariffs, power exchanges, green power exchanges and rooftop solar. For many global businesses, India is increasingly a market where 100% renewable energy targets are practically achievable.
This corporate demand can support the next phase of renewable procurement, provided contracts become more flexible and grid-aligned.
The opportunity of green hydrogen
Green hydrogen should not be seen only as a futuristic fuel. It can become a demand sink for excess daytime renewable power. When solar generation exceeds immediate grid demand, that electricity can be used for electrolysis to produce hydrogen. This hydrogen can then be used in refineries, fertilisers, steel, chemicals, shipping or long-duration storage applications.
This does not mean hydrogen will solve all storage problems. It is less efficient than direct electrification or batteries for many applications. But for hard-to-abate sectors and surplus renewable absorption, it can become important.
Why one-size-fits-all policies won’t work
India should not try to do everything everywhere at once. The transition must be segmented.
For rural India, agricultural feeder solarisation, reliable daytime supply, pump efficiency, local storage and feeder-level management may matter more. For urban India, rooftop solar, time-of-day tariffs, housing society batteries, EV charging behaviour and high-consumption household pricing may matter more.
For industry, open access, green power procurement, demand shifting, captive renewables, storage-backed contracts and power exchange participation may matter more.
For DISCOMs, revenue protection, smart meters, loss reduction, balancing incentives and regulatory reform may matter more. For the national grid, Green Energy Corridors, inter-regional transfer capacity, grid-scale storage, forecasting and dispatch intelligence may matter more.
This is the essence of Energy Transition 2.0. It needs not one national solar policy, but multiple connected interventions across different consumer classes, regions and grid layers.
| India needs a portfolio approach comprising several elements: | ||
|---|---|---|
| To generate clean electricity | To balance supply and demand | To build a resilient energy system |
| Rooftop solar | Grid-scale storage | Flexible coal |
| Utility-scale solar and wind | Distributed batteries | DISCOM reform |
| Domestic manufacturing | Time-of-day tariffs | Green Energy Corridors |
| Smart EV charging | Green hydrogen | |
| Energy sovereignty | ||
This is the pathway for solar to move from an average 9% share in energy generation today to 18-20% by 2030-31.
And beyond that, the pathway depends on whether India can build a truly intelligent power system. India has already achieved the easier hard thing: proving that renewable energy can scale.
The harder challenge begins now. Building an electricity system that is reliable, flexible, affordable and strategically independent will require better markets, stronger institutions, smarter grids and domestic manufacturing that extends far beyond assembling solar modules.
If India succeeds, solar will become more than another source of electricity. It will underpin the country’s energy security, industrial competitiveness and long-term economic resilience.
Sainath Gurav is Founder & Managing Director, Sthaar Consulting.
This concludes our three-part series on India’s energy transition. Read the first part here and the second here.
Inspired to Take Action?
Tl;dr: A summary for the busy, the curious, and the done-for-today
India's next energy challenge is no longer scaling solar generation but building a reliable, flexible and sovereign power system that can support much higher renewable penetration.
Energy security will depend on strengthening domestic manufacturing across the clean energy value chain while reforming DISCOMs to become enablers rather than barriers to the energy transition.
Electricity markets and renewable power contracts must evolve to support storage, hybrid projects, flexible demand, balancing services and growing corporate demand for clean energy.
Green hydrogen, smart EV charging, grid-scale storage and time-of-day tariffs can help absorb surplus renewable power and improve overall grid stability.
India's Energy Transition 2.0 requires a portfolio approach with tailored solutions for households, industry, DISCOMs and the national grid to deliver reliability, affordability, energy sovereignty and 18 to 20 percent solar generation by 2030-31.
