Government Links Renewable Energy Adoption with State Fiscal Incentives: Pralhad Joshi

Pralhad Joshi, Union Minister for New and Renewable Energy, said the government has approved a new policy framework linking renewable energy adoption with fiscal incentives for states as India accelerates its clean energy transition and power purchase agreement expansion, as per news reports. 

Renewable Energy Adoption to Influence State Incentives 

Speaking at the CII Annual Business Summit, Pralhad Joshi said renewable energy adoption metrics will increasingly play a role in determining fiscal incentives for states. 

According to the minister, the new framework has already received approval from both the finance ministry and the power ministry. “This is a new policy accepted by finance and power ministries,” Joshi said. 

He added that renewable energy-related parameters may also be considered while extending interest-free loans to states, though detailed guidelines are yet to be announced. 

The move is aimed at encouraging states to accelerate renewable energy procurement and sign more power purchase agreements (PPAs). 

Government Introduces Quality Controls for Solar Modules 

Joshi said the government is simultaneously tightening oversight on imported solar equipment quality. A standardised warranty structure has now been introduced for solar photovoltaic modules, with the government mandating a minimum warranty period of 10 years.  

According to the minister, the measure is expected to improve “reliability, investor confidence and overall quality.” 

The government has also launched a renewable energy equipment import monitoring system. Joshi stated, “We have developed an app for regular monitoring in collaboration with the commerce ministry.” 

Multiple Routes Introduced for Renewable Energy Compliance 

The minister said compliance with revised renewable energy consumption obligations can now be achieved through three separate mechanisms. 

These include direct renewable energy consumption, purchase of renewable energy certificates including virtual PPAs, and payment of buyout prices. 

Commenting on carbon border adjustment measures such as CBAM, Joshi said “In the coming years, exporters who rely on carbon-intensive production systems will face increasing cost pressures and market barriers”. 

Joshi also referred to the Central Electricity Regulatory Commission’s notification of the carbon credit certificates regulation, 2026, stating that the framework is expected to support additional PPA activity. 

Renewable Energy Deal Values Rise Sharply 

Despite a slowdown in the number of renewable energy transactions, deal values have risen significantly.According to the minister, renewable energy deals declined from 21 in 2024 to 18 in 2025. However, total deal values increased more than fivefold from $378 million to nearly $2 billion. 

This comes even as global renewable energy investments declined 7% in 2025, according to a report released by London-headquartered law firm Fieldfisher. 

Government May Review 500 GW Renewable Target 

Responding to industry suggestions on raising India’s 500 GW renewable energy ambition, Joshi said the government could examine the proposal within the next 1-2 years, while adding that the immediate focus remains on resolving existing sector constraints in coordination with the power ministry. 

Read More: Government To Soon Introduce ‘Made in India’ Branding Scheme: DPIIT Secretary! 

Conclusion 

The government is expanding policy support for renewable energy through financial incentives, quality controls and compliance reforms as India continues strengthening its clean energy ecosystem and long-term decarbonisation strategy. 

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