New Delhi: India’s electricity transition is advancing across states, but no single state has emerged as an all-round leader across decarbonisation, grid readiness and market enablers, according to the latest Indian States’ Electricity Transition (SET) 2026 report by the Institute for Energy Economics and Financial Analysis (IEEFA) and Ember. The report finds that while all 21 states assessed — accounting for about 95 percent of India’s power demand — have made progress across multiple parameters, performance remains uneven and concentrated in specific areas rather than system-wide.
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Under the decarbonisation dimension, the report notes that “no state demonstrates strong performance across all six parameters,” highlighting substantial heterogeneity in how states are shifting to renewable electricity, improving energy efficiency and lowering emissions intensity.
A similar pattern is observed in the power ecosystem dimension, where “no state demonstrates consistently strong performance across all parameters,” indicating that readiness for integrating renewable energy remains fragmented.
“India’s electricity transition is maturing into a multi-speed transition, where instead of a single leader across all areas, we are witnessing new leaders in specific areas,” said Ruchita Shah, Energy Analyst at Ember and co-author of the report.
Karnataka, Himachal Pradesh and Kerala stood out in the decarbonisation dimension, supported by higher renewable energy shares in procurement and lower power sector emissions intensity. Karnataka, for instance, sourced around 37 percent of its electricity procurement from renewables and performed strongly in the State Energy Efficiency Index (SEEI) 2024.
However, even leading states face structural gaps. The report shows that Karnataka has utilised only a fraction of its total renewable energy potential, leaving significant untapped capacity.
Similarly, Rajasthan recorded the highest annual renewable energy capacity growth rate at 26 percent over the past five financial years, but has utilised only about 8 percent of its renewable energy potential as of March 2025.
Bihar presents another contrast. While it has introduced green tariffs, solar-hour-aligned time-of-day (ToD) tariffs and made progress in electric vehicle adoption, it has utilised only around 3 percent of its renewable energy potential.
“Such divergence is inevitable at the sub-national level given the structural and historical factors, including differences in resource endowment, development legacies, states’ fiscal and economic conditions, rural-urban composition, and institutional capacity within the power sector,” said Vibhuti Garg, Director (South Asia), at IEEFA and co-author of the report.
In the power ecosystem dimension, Delhi and Haryana emerged as strong performers, driven by robust distributed solar adoption, reliable power supply and relatively sound DISCOM performance. Delhi, for instance, installed 303 MW of distributed solar capacity as of March 2025, accounting for nearly 97 percent of its total installed solar capacity and 76 percent of its total renewable energy capacity. The capital also recorded zero energy shortage in FY2025.
Yet, the report underscores that high performance in one area does not automatically translate into overall transition leadership. SET 2026 states that “progress in individual dimensions does not automatically translate into a system-wide electricity transition,” even though advancements have been made across multiple fronts.
The report identifies DISCOM performance, smart metering, short-term market participation and distributed solar uptake as critical enablers of the next phase of transition. In states where these remain weak, renewable capacity additions alone may not ensure sustained decarbonisation.
The market enablers dimension — which includes EV ecosystem development, green tariffs, green open access, storage deployment and green hydrogen uptake — saw Andhra Pradesh, Uttar Pradesh and Rajasthan emerge as strong performers due to updated renewable policies and tariff mechanisms.
However, the report cautions that states must translate enabling policies into higher renewable procurement shares and stronger grid performance to unlock a comprehensive transition.
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“All the 21 states assessed have advanced on multiple fronts, even as the pace and areas of focus vary,” Garg said.
The findings suggest that India’s electricity transition has entered a more complex phase, where integration, institutional reform and system-level readiness will determine whether states can move from fragmented gains to balanced, low-carbon power systems.
