Month in a Minute: Top Headlines from the Indian Renewable Sector in February 2026

IEX Power Trade Surges 30% YoY to 12,550 MU in February

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POWERGRID Floats Tenders to Set Up 300 MW/600 MWh Battery Storage Systems

Project Finance Brief: Arevon Energy Secures $183 Million for Solar Project

Funding and M&A Roundup: SolarAfrica Energy Secures $39 Million

UltraTech to Procure Solar Power from AMPIN SPV’s 30 MW Project

Bihar Announces Generic Renewable Energy Tariffs for FY 2026

Rooftop Solar Installations Under PM Surya Ghar Reach 3 Million

Terra Clean Issues Tender for 291 Transformers for Renewable Energy Projects

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					</table>Despite record-low renewable energy tariffs, several states have entered long-term thermal power purchase agreements (PPAs) at significantly higher tariffs of ₹5.38 (~$0.059)-₹7.27 (~$0.079)/kWh, reflecting concerns over supply security, baseload requirements, and renewable intermittency.
In recent months, several states have signed multiple power purchase agreements for coal-based thermal power.
In September 2025, Bihar signed a PPA for a 2.4 GW ultra-supercritical coal project at Pirpainti in Bhagalpur district with a tariff of ₹6.075 (~$0.067)/kWh. A month later, Assam cleared a 3.2 GW coal project at ₹6.30 (~$0.069)/kWh.
Similarly, Madhya Pradesh’s 3.2 GW Mahan project in Singrauli, developed by the Adani Group, has a discovered tariff of ₹5.83 (~$0.064)/kWh and is under regulatory scrutiny.
Distribution companies (DISCOMs) in Maharashtra, Madhya Pradesh, and West Bengal have awarded 4.5 GW of coal-based projects under long-term PPAs, with tariffs discovered well above ₹5 (~$0.054)/kWh.
Tariffs for these projects are significantly higher than those for standalone solar, wind, and even firm and dispatchable renewable energy (FDRE).
In recent years, winning FDRE bids have ranged from ₹4.35 (~$0.047) to ₹6.75 (~$0.074)/kWh, and the discovered tariffs are gradually declining.
In <a href="https://www.nhpcindia.com/" target="_blank" rel="noopener">NHPC</a>’s 1.2 GW FDRE <a href="https://www.mercomindia.com/nhpc-fdre-auction-ii" target="_blank" rel="noopener">auction</a> in 2024, the lowest discovered tariff was ₹4.37 (~$0.048)/kWh.
The DISCOMs’ Case for Coal
For DISCOMs, thermal PPAs offer long-established contracting structures and operational familiarity. Operating in a constrained financial and regulatory environment, predictability is a critical consideration for utilities.
Thermal power offers predictable generation patterns and established payment mechanisms, reducing perceived risk.
Commenting on this trend, Bharat Sarda, Senior Manager, Business Development at <a href="https://www.jswenergy.in/" target="_blank" rel="noopener">JSW Energy</a>, noted that although hybrid and storage-backed renewable solutions are gaining traction, their current scale, storage duration, and cost structures limit their ability to fully substitute firm supply.
“Long-term thermal PPAs are often contracted to address anticipated capacity shortfalls, retirement of aging generation assets, and near- to medium-term system reliability needs. In many cases, these procurement decisions are also influenced by delays in transmission expansion, balancing infrastructure, and the operational readiness required to integrate high levels of variable renewable energy,” he said.
“The DISCOMs opting for thermal PPAs is less an economic decision and more a consequence of risk aversion. Many DISCOMs continue to rely on legacy thermal-centric planning models, prioritizing perceived firmness over actual system cost optimization,” said Manish Khare, Managing Director at <a href="https://www.khareenergy.com/" target="_blank" rel="noopener">Khare Energy</a>.
Despite the rapid growth of renewable energy, the government plans to add 100 GW of new coal-fired capacity over the next six to seven years. However, existing and under-construction coal capacity already exceeds the coal requirement projected for 2030.
Long-term coal PPAs lock DISCOMs into procuring relatively expensive thermal power, limiting their ability to fully utilize lower-cost renewable generation.
Speaking in favor of cheaper renewables, Kishor Nair, Chief Executive Officer at <a href="https://www.avaada.com/" target="_blank" rel="noopener">Avaada Energy</a>, said, “The historical argument that solar and wind cannot meet peak demand belonged to the early phase of renewable deployment. Hybrid projects and battery-backed solutions have fundamentally altered the equation internationally. Solar-wind hybrids smooth generation profiles. Storage provides dispatchability. Pumped hydro enables bulk and multi-day balancing. Then we have a round-the-clock (RTC) renewable energy supply, which is now technically viable and commercially competitive. Yet procurement thinking in many DISCOMs remains anchored to a 20th-century framework: thermal equals reliability.”
Locking into 25-year thermal PPAs at ₹6.64 (~$0.073)/kWh when renewable RTC solutions are available for less than ₹5 (~$0.054)/kWh reflects risk aversion &#8211; not cost optimization. In fact, renewable RTC solutions provide a ‘real’ PPA tariff for 25 years, as thermal procurement costs are about 70% driven by variable fuel costs, which are liable to increase year over year, adding a double burden to India’s import bills.
“The real issue is institutional comfort.”
A report by the Centre for Research on Energy and Clean Air (<a href="https://energyandcleanair.org/" target="_blank" rel="noopener">CREA</a>) projects that coal capacity could rise to 119% of 2024 levels by 2030, while coal generation declines to around 98%, pushing plant load factors down to nearly 51.8% and increasing the risk of stranded assets.
 Renewables Offer a Natural Choice
Meeting India’s 500 GW non-fossil capacity target by 2030 means there is no room for coal capacity addition between now and 2030, even if power demand growth picks up in the coming years.
Addressing the argument that renewables cannot meet peak demand, Nair said this concern was valid in the early years of large-scale renewable deployment. However, the landscape has changed significantly. Hybrid projects combining solar and wind, along with battery energy storage systems and pumped hydro solutions, have enhanced the ability to provide a more stable and predictable supply.
“Long-term thermal PPAs effectively defer accountability. They allow DISCOMs to postpone difficult but necessary reforms such as grid modernization, demand forecasting, flexibility procurement, and storage integration. While thermal PPAs offer short-term operational comfort, they lock consumers into structurally higher costs for decades,” Khare noted.
According to CREA, in 2025, thermal and nuclear showed a decline in generation of 4% year-over-year (YoY) and 2% YoY, respectively, while large hydro and renewable energy grew by 15% YoY and 22% YoY, respectively.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Total-Electricity-Generated-by-Source-2019-2025-in-India-BU.jpg"><img loading="lazy" decoding="async" class="aligncenter wp-image-91120 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Total-Electricity-Generated-by-Source-2019-2025-in-India-BU.jpg" alt="Renewables Growth Yet to Shift Thermal-Centric State Procurement Strategies" width="1188" height="647" /></a>
“Modern renewable projects are equipped with synchronous condensers, harmonic filters, FACTS devices, and, when clubbed with battery storage, can provide ‘inertia’ to the grid that the thermal plants have long been lauded for. Thermal PPAs include variable and fixed costs, with escalations built into the tariff,” Nair added.
RTC renewable power is available for a levelized tariff for 25 years. The renewable power tariffs on the generation schedule of thermal will work out much cheaper than thermal, even on an RTC basis.
Nair emphasized that grid readiness and transmission infrastructure are important enablers of high renewable penetration. In regions where transmission capacity or grid flexibility is constrained, utilities may opt for thermal procurement as a near-term solution due to its ease of dispatch and predictability.
“However, India’s long-term energy strategy clearly emphasizes synchronized investments in renewables, storage, and grid modernization. Strengthening transmission networks and deploying flexible resources will be essential to fully realise the cost and sustainability advantages of renewable energy.”
Annual renewable additions continue to accelerate, and year over year, a greater share of total demand is met by solar, wind, and hydropower. Battery storage capacity is also expanding rapidly and will further strengthen system reliability over the next few years.
The <a href="https://npp.gov.in/" target="_blank" rel="noopener">National Power Portal</a> data shows that the thermal sector’s plant load factor (PLF) increased from 68% in CY 2023 to 70% in CY 2024, before falling to 66% in CY 2025.
India recorded its highest-ever annual solar capacity addition in the calendar year 2025, installing 36.6 GW, a 43% increase over the 25.6 GW added in 2024, according to Mercom India’s recently released <a href="https://www.mercomindia.com/product/q4-2025-india-solar-market-update" target="_blank" rel="noopener">Q4 and Annual 2025 India Solar Market Update Report</a>.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Indias-Installed-Power-Capacity-by-Source-2019-2025-GW.jpg"><img loading="lazy" decoding="async" class="aligncenter wp-image-91142 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/02/Indias-Installed-Power-Capacity-by-Source-2019-2025-GW.jpg" alt="Renewables Growth Yet to Shift Thermal-Centric State Procurement Strategies" width="1277" height="640" /></a>
The Way Forward
Looking forward, Nair said the state DISCOMs should issue technology-agnostic tenders to meet their power requirements and do away with sourcing power from coal-based projects at a higher tariff as a base option on the same terms (fixed tariff).
“The focus should now be on scaling these solutions through well-designed tenders, clear dispatch mechanisms, and strong payment security structures. Technically, renewable energy supported by storage can increasingly address peak demand reliably and cost-effectively,” he said.
“Renewable-plus-storage contracts, although increasingly competitive, are relatively new and require adjustments in forecasting, scheduling, and regulatory oversight. Over time, as more projects demonstrate performance and stability, procurement preferences are likely to diversify toward flexible renewable solutions,” Nair opined.
It is time for DISCOMs to consider various options for using renewable power on an RTC basis.
As the DISCOMs continue to opt for thermal power, state regulatory bodies are, however, subjecting such procurements to tighter scrutiny amid the expansion of renewable capacity.
In a significant ruling in November last year, the Rajasthan Electricity Regulatory Commission questioned coal procurement and <a href="https://www.mercomindia.com/rajasthan-regulator-backs-clean-energy-push-nixes-3-2-gw-thermal-power-plan" target="_blank" rel="noopener">rejected</a> a petition by the state-owned power trading company to procure 3.2 GW of coal-fired thermal power, saying the proposal is inconsistent with the state’s renewable energy policy framework.
While the existing and under-construction thermal power projects are already sufficient to meet non-solar-hour demand, the rise in renewable generation and the gradual surge in energy storage deployment make the case for new coal capacity additions much weaker.

Renewables Growth Yet to Shift Thermal-Centric State Procurement Strategies

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					</table>Agrivoltaics, the integration of solar power generation with agriculture, is emerging as a game-changer for India&#8217;s energy and farming sectors. Agrivoltaics enables dual land use, helping farmers generate their own energy while continuing to grow crops.
Indore-based renewable energy company <a href="https://www.khareenergy.com/" target="_blank" rel="noopener">Khare Energy</a> offers customized agrivoltaic solutions tailored to the specific needs of farmers and the local environment.
In an exclusive interview with Mercom India, Manish Khare, Managing Director of Khare Energy, spoke about agrivoltaics, the innovations driving it, and its potential impact on Indian farmers.
What is agrivoltaics, and how does it work?
Agrivoltaics is a method in which solar panels are installed at an elevated height, allowing crops to grow beneath them while generating electricity. The strategic placement of panels ensures that crops receive adequate sunlight while benefiting from partial shading, reducing temperature and water loss due to evaporation. This dual-use model maximizes land productivity and creates a synergy between farming and renewable energy.
The concept is simple yet highly effective. By placing solar panels at an elevated position, sunlight is efficiently divided between electricity generation and plant growth. The shade provided by the panels helps prevent excessive heat stress, which is particularly beneficial for regions prone to high temperatures.
What are the key innovations driving this sector?
Several technological advancements are enhancing agrivoltaics&#8217; efficiency. One of the most critical innovations is the development of elevated and adjustable solar structures that cater to different crops. Smart shading algorithms are another breakthrough, as they optimize sunlight distribution to maximize both crop growth and energy production. Additionally, the Internet of Things-based monitoring systems track soil moisture, climate conditions, and solar performance, providing real-time data to farmers and energy managers.
A major leap is AI-powered agrivoltaic management software. This software enables real-time decision-making by analyzing various parameters, including soil conditions, crop type, and energy needs. It allows farmers to plan crop cycles more effectively while ensuring that solar panels operate at maximum efficiency.
How does agrivoltaics balance energy generation and crop production?
Agrivoltaic systems are designed to ensure that both solar panels and crops receive optimal benefits. The panels provide necessary shade to reduce evaporation and protect crops from excessive heat. This results in better water retention in the soil and a more stable microclimate, which can boost crop resilience.
The energy output of agrivoltaics systems remains high, typically maintaining a capacity utilization factor of 18–20%.
In many cases, crops grown under this system have shown increased resilience to extreme weather conditions, demonstrating that this approach can provide long-term benefits to farmers.
How does this technology benefit farmers in India? What kind of investments are required?
Agrivoltaics provides farmers with multiple advantages, including financial stability, resource efficiency, and climate resilience. Farmers can earn a dual income by cultivating crops while selling or using solar energy.
Additionally, this model acts as a guard against climate fluctuations, particularly in regions that experience droughts or extreme temperatures.
The financial aspect of agrivoltaics is also promising. Setting up a 1 MW agrivoltaic project requires approximately ₹50 million (~$583,710) and covers about five acres of land. However, government initiatives such as the Component-A of Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan provide viability gap funding of up to 30% and bank financing of up to 70%, which can significantly reduce the financial burden on farmers and developers.
What challenges do farmers face in adopting agrivoltaics?
Despite its numerous advantages, the adoption of agrivoltaics faces several challenges in India. One of the biggest challenges is the farmers&#8217; lack of awareness and technical knowledge. Many farmers are unaware of how agrivoltaics works and are hesitant to implement it due to concerns about crop yield and land utilization.
Additionally, the initial investment, even with subsidies, can be a deterrent for small-scale farmers. Regulatory and policy challenges also pose significant obstacles. Land-use permissions, grid connectivity approvals, and other bureaucratic hurdles can slow the implementation of agrivoltaic projects.
Farmers need clear guidelines and simplified processes to make the transition smoother. Addressing these issues through awareness programs, financial support, and policy improvements is crucial to accelerating agrivoltaics adoption.
Are certain crops better suited for agrivoltaics?
Yes, certain crops thrive under agrivoltaics conditions, particularly those that benefit from partial shading. Shade-tolerant and semi-shade crops such as spinach, coriander, brinjal, tomatoes, and drumsticks perform well. Spices and herbs, including turmeric, aloe vera, and lemongrass, also adapt well to this environment.
Fruit crops such as strawberries and melons have shown promising results when cultivated under solar panels. Additionally, pulses and oilseeds such as moong, urad, and mustard can be successfully grown in agrivoltaics setups, particularly when used in rotational farming. Selecting the right crops is key to ensuring an agrivoltaics system&#8217;s success.
What are the major hurdles in scaling agrivoltaics in India?
Several factors hinder the large-scale adoption of agrivoltaics in India. One of the biggest challenges is the inconsistency in land-use policies across different states. Regulations regarding land conversion and solar farm development vary, making it difficult to implement a uniform strategy.
Limited rural grid infrastructure poses another challenge, as seamless integration of electricity is necessary for effective energy distribution. Financing and insurance issues are also concerns. Many financial institutions are still hesitant to provide loans for agrivoltaics projects due to a lack of familiarity with the model.
The absence of standardized designs and performance benchmarks makes it difficult to evaluate and scale projects efficiently. However, Khare Energy is working to establish pilot sites and create standardized models to address these challenges and drive wider adoption.
Where do you see the future of agrivoltaics in the next decade?
Agrivoltaics is set to play a transformative role in India&#8217;s renewable energy and agricultural sectors. With over 15 million hectares of cultivable wasteland and the government&#8217;s target of 500 GW of renewable capacity, the potential for agrivoltaics is enormous.
In the coming decade, we expect agrivoltaics to shift from pilot projects to mainstream adoption, driven by increased government support and private-sector investment. Several states, including Telangana, Madhya Pradesh, and Uttar Pradesh, will likely develop state-specific agrivoltaics policies to encourage large-scale implementation.
Private investments, CSR initiatives, and climate funds will further accelerate deployment. Agrivoltaics can potentially empower rural communities by providing sustainable income opportunities, particularly for women and young farmers.

Through Agrivoltaics, Farmers Can Earn Dual Income from Crops and Solar: Interview

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