Saatvik Green Energy Acquires 80% Stake in Transformer Manufacturer

MERC Rejects Avaada’s ₹477 Million Change-in-Law Compensation Claim

CleanCapital Sells 120 MW Solar Project in Ohio

MERC Approves Tariffs for 8 MW Round-the-Clock Renewable Energy

EMERAM Acquires Stake in Home Energy Management Firm Solar Manager

Maharashtra Forms Panel to Review Electricity Duty on Rooftop Solar

Sterling and Wilson’s Revenue Drops 23% but Profit Surges in Q4 FY 2026

Adani Green Energy Operationalizes 292 MW Solar Project in Gujarat

EIE Renewables to Acquire 150 MWh Battery Storage Project in Bihar

MERC Approves 60 MW Wind-Solar PPA Withdrawal, Citing High Tariff

<table id="amazon-polly-audio-table">
						<tr>
						<td id="amazon-polly-audio-tab">
							<div id="amazon-ai-player-label">Listen to this article</div>
							<div id="amazon-ai-player-container">
			<audio class="amazon-ai-player" id="amazon-ai-player" preload="none" controls controlsList="nodownload" >
				<source type="audio/mpeg" src="https://cms.mercomindia.com/wp-content/uploads/2025/12/amazon_polly_88326.mp3?version=1767072668">
			</audio>
		</div>
							<div id="amazon-polly-subscribe-tab"></div>
							<div id="amazon-polly-by-tab"></div>
						</td>
						</tr>
					</table>India made significant strides in strengthening its domestic upstream renewable energy supply chain and added substantial solar generation capacity in 2025. However, the renewable energy sector also faced several major challenges, including transmission infrastructure, solar curtailment, energy banking, and glitches in the PM Surya Ghar: Muft Bijli Yojana portal.
Power Curtailment
Between March and August this year, Rajasthan witnessed nearly 4 GW of solar and wind power curtailment due to a combination of transmission delays, corridor congestion, and subdued power demand during an extended monsoon season. The scale of curtailment led to significant financial losses for developers, estimated at ₹2.3 billion ($26.25 million) to ₹2.5 billion ($28.53 million) over the period.
Other major renewable energy states, including Gujarat, Maharashtra, and Tamil Nadu, also experienced 10%-30% curtailment during peak solar generation hours, highlighting the growing strain on grid infrastructure across regions.
These curtailments point to a broader national challenge, where renewable energy capacity additions have outpaced the expansion of transmission infrastructure, resulting in network saturation and time-block-based curtailment, even though renewables are classified as must-run resources.
In Rajasthan, the situation was further exacerbated by a delay of more than 18 months in commissioning a key transmission system strengthening program, which has constrained the evacuation of 8.1 GW of renewable power from a designated renewable energy zone, creating persistent bottlenecks in one of India’s most solar-rich states.
Grid Instability and Transformer Failure
In the third and fourth quarters of 2025, India’s electricity grid experienced persistent high-frequency conditions, with grid frequency remaining above the prescribed ceiling on 39 days. On these days, the frequency exceeded the Indian Electricity Grid Code (IEGC) band of 49.90 Hz to 50.05 Hz for more than 20% of the time, indicating sustained system imbalance.
The high-frequency episodes were primarily driven by increased solar power injection combined with limited operational flexibility to back down thermal generation to accommodate rising renewable energy output. The trend highlights growing challenges in real-time grid balancing as renewable penetration increases.
During the year, electricity distribution transformers recorded high failure rates, further stressing the power system. According to the Central Electricity Authority (CEA), the national distribution transformer failure rate averages around 10%, translating to nearly 1.3 million failures annually.
In a separate assessment, the CEA reported 17 power transformer failures at voltage levels of 220 kV and higher between January and June 2025. However, the authority cautioned that the actual number is likely higher, as many state, central, and private transmission utilities did not report all failure incidents.
Rising equipment costs have compounded these challenges. Transformer prices have more than doubled, increasing from around ₹140 million ($1.59 million) to ₹300 million ($3.41 million). Similarly, the cost of a gas-insulated switchgear bay rose sharply from ₹60 million ($684,000) to ₹150 million ($1.7 million). These escalating costs are affecting project timelines and increasing capital requirements for transmission infrastructure expansion.
Supply Chain Constraints
Long delivery timelines for transformers and switchgear, along with a shortage of Domestic Content Requirement (DCR)-compliant solar modules, delayed several renewable and transmission projects. Stakeholders reported mounting stress across the power sector supply chain, with component availability lagging demand for critical equipment, including transformers, control relay panels, transmission towers, insulators, and gas-insulated switchgear. Extended procurement timelines for these components have led to delays in both transmission infrastructure and power generation projects.
Transmission developers also faced prolonged equipment delivery schedules for key components such as circuit breakers, isolators, and control relay panels, compounded by a limited pool of quality manufacturers in the high-voltage and extra-high-voltage segments. Lead times for critical high-voltage equipment, including 220 kV and 400 kV switchyards, transformers, and isolators, stretched to around 20 months, adding further pressure to project execution timelines.
Module availability also tightened during the period as domestic DCR cell supply failed to keep pace with rising demand. While manufacturing capacity under the Approved List of Models and Manufacturers (ALMM) List I and II expanded, a significant portion of high-efficiency TOPCon production lines was already committed to PM-KUSUM and Central Public Sector Undertaking (CPSU) projects, limiting supplies available for inter-state transmission system (ISTS) and state-level tenders.
At the same time, developers reported continued shortages of mono PERC cells as Chinese manufacturers increasingly shifted production toward TOPCon technology, further constraining module availability for ongoing projects.
Phase-Out of ISTS Charges Waiver
In June this year, the government announced a phased withdrawal of ISTS charges waiver for renewable energy, energy storage, green hydrogen, and green ammonia projects. Under the revised framework, projects commissioned in successive years up to June 30, 2028, will be eligible for progressively lower waivers, declining from 75% to 25%, while projects commissioned after June 30, 2028, will no longer qualify for any ISTS charges waiver.
To secure the 100% waiver available before the deadline, many developers opted for partial commissioning of projects, banking on the possibility that the Ministry of New and Renewable Energy (MNRE) may grant deadline extensions.
The phased withdrawal raised concerns over higher landed power costs beyond 2028, particularly for projects reliant on interstate transmission. It has also created an uneven market environment, with developers rushing to lock in incentives while still facing execution bottlenecks.
Aggressive Bidding in BESS Auctions
Despite declining battery energy storage system (BESS) costs, the energy storage segment faced high upfront costs, supply chain vulnerabilities, and execution delays amid aggressive tendering within the year.
Aggressive bidding in BESS auctions raised fears about reduced project viability over 15–25 years.
Due to limited BESS manufacturing capabilities in India, the market continued to depend on imports, mainly from China.
Energy Banking Restrictions
Grid instability concerns prompted a few distribution companies to restrict banking facilities and encouraged the adoption of storage solutions. In Maharashtra, energy banking limits, adverse time-of-day tariffs, and open-access charges led commercial and industrial consumers to scale back investments.
Once a leader in rooftop solar under PM Surya Ghar: Muft Bijli Yojana, Kerala witnessed a sharp drop in installations after the Kerala State Electricity Regulatory Commission proposed limiting net metering to projects up to 3 kW. The Commission also mandated energy storage of up to 30% for projects between 3 kW and 5 kW.
Glitches in PM Surya Ghar Portal 
Incorporating DCR verification process with the PM Surya Ghar portal led to delays in project commissioning. The government&#8217;s efforts to ensure only DCR-compliant modules are used for PM Surya Ghar projects went awry as integration issues created problems for installers. Duplicate module serial numbers flooded the portal, preventing genuine installers from updating module details.
As cell manufacturers prioritized meeting export demand over meeting domestic supply, installers bore the brunt of severe DCR module supply shortages. Module costs rose, leading to overall project costs increasing, with DCR-compliance becoming the norm.
Land Acquisition and RoW Issues
Land acquisition continues to be a major hurdle for project development. Securing large, contiguous land parcels is particularly challenging due to fragmented landholdings, unclear ownership and title records, limited digitization of land records, and lengthy approval processes.
Transmission infrastructure projects are similarly affected, with landholder opposition and right-of-way disputes delaying several critical developments and slowing the pace of grid expansion needed to support renewable energy growth.

The Biggest Challenges India’s Renewable Energy Sector Faced in 2025

grid-instability

Get the most relevant India solar and clean energy news.

RECENT POSTS