Renewable Energy and Green Hydrogen in India

India ranks third in the world for installed renewable capacity, and foreign capital enters it four different ways — as a generation developer, a corporate power buyer, a green-hydrogen producer or an equipment manufacturer. Each is a different business, with a different offtake, risk and structure.

• India ranks third in the world for installed renewable capacity, with non-fossil capacity past 283 GW (about 150 GW solar, 56 GW wind) as of March 2026 — it crossed 50% non-fossil power five years ahead of target; renewable energy is open to 100% FDI on the automatic route.
• The opportunity is four businesses: generation projects (an IPP), corporate renewable-power procurement, green hydrogen and ammonia, and equipment manufacturing — each with its own structure.
• Many foreign entrants are power buyers rather than developers — data centres, factories, EV and electronics plants, GCCs — needing captive, group-captive, open-access or green-PPA supply.
• Generation runs on auctions, PPAs and the transmission waiver, but grid discipline — forecasting, scheduling and deviation penalties — is becoming part of the project risk.
• Green hydrogen turns on offtake; green ammonia is as much a port, storage and buyer-credit problem as an electrolyser one.
• Solar manufacturing has scaled fast at the module level, but upstream integration is weaker, PLI disbursement is performance-linked and not immediate, and export-led plants face trade-measure risk.

Generation is the largest and most established route, and it runs on a well-developed market structure. Utility-scale capacity is awarded through competitive auctions — many run by the Solar Energy Corporation of India, which also acts as an intermediary offtaker, signing power-sale agreements that give projects a bankable long-term buyer — and through state tenders; increasingly the market is moving to hybrid solar-wind, round-the-clock renewable and battery-storage projects that firm up intermittent supply, with viability-gap funding now backing standalone battery storage. The economics turn on more than the tariff: the inter-state transmission charge waiver — a full twenty-five-year waiver for solar and wind commissioned by mid-2025, tapering for later commissioning and ending for projects commissioned after mid-2028, with longer windows for green-hydrogen, storage and offshore-wind projects — materially affects the cost of moving power to demand, so the waiver position must be checked against the commissioning date and technology; and evacuation, grid connectivity and land are often harder than the bid itself. Foreign investors typically build through a project special-purpose vehicle per asset, on the automatic route with full foreign ownership, often in joint venture with a domestic developer or EPC for land aggregation, state liaison and bid eligibility, with land leased from state renewable-energy parks rather than owned outright, consistent with the rule against real-estate dealing.

New grid discipline is becoming part of the project risk. Renewable projects are increasingly exposed to forecasting, scheduling, deviation-settlement and storage requirements, and tighter grid rules expected later in the decade would sharpen the penalties where actual generation deviates from the forecast. For wind, solar and hybrid projects the legal and financial model should not stop at the tariff and the PPA; it should also test evacuation, grid connectivity, forecasting liability and the cost of managing intermittency — increasingly through storage.

The manufacturing route is a distinct business with its own incentive and its own risks, and it calls for caution as well as ambition. Solar-module capacity has expanded very fast, supported by a dedicated PLI and protected by the Approved List of Models and Manufacturers, and electrolyser and storage manufacturing are supported in parallel. But three cautions matter. The PLI support is performance-linked and not immediate — letters of award have been issued for tens of gigawatts of capacity, yet as of early 2026 little or no PLI had actually been disbursed, because the post-commissioning conditions had not been met, the familiar pattern across India's incentive schemes. Upstream integration is weaker than the module headline suggests: India makes modules far more than it makes the cells, wafers and polysilicon behind them — module capacity is now around 170 gigawatts while domestic cell capacity remains far smaller — so a manufacturer's localisation and supply-chain position needs real scrutiny. This is changing fast: from June 2026 the Approved List of Models and Manufacturers extends to solar cells (List-II), so India-installed modules must use listed Indian cells, which is pulling cell capacity up sharply; a basic customs duty on imported cells and modules pushes the same way, and a dedicated polysilicon incentive is under consideration to close the last upstream gap. And export-led manufacturing is exposed to trade measures abroad — a large majority of Indian solar-module exports went to the United States, and the substantial US tariffs imposed in 2025 caused those exports to fall sharply, a direct risk to an export-oriented plant. A manufacturer should model the domestic-versus-export mix, the upstream integration and the disbursement timing as carefully as the headline incentive.

A renewable-energy entry is more than an incorporation or an incentive application. The legal structure usually has to bring together several workstreams:

• choosing the project SPV, manufacturing company, services vehicle or corporate-procurement structure, and the investment route;
• securing offtake — the SECI or state power-purchase agreement, the SIGHT award and a creditworthy hydrogen or ammonia buyer, or the captive, group-captive or open-access structure for a corporate buyer;
• structuring land lease, evacuation, grid connectivity and the transmission-waiver position as a genuine operating business;
• testing forecasting, scheduling, deviation-settlement and storage and grid-discipline obligations;
• for corporate buyers, the open-access, wheeling, banking, cross-subsidy, captive-threshold and green-attribute position;
• mapping eligibility under the SIGHT, solar-module or electrolyser incentives, the approved-list and value-addition conditions, and the disbursement timing;
• documenting technology licence, royalty and transfer-pricing on imported equipment and EPC;
• EPC, equipment-supply, operations-and-maintenance and grid-connection contracts;
• Press Note 3 analysis where ownership, control, capital or technology has a land-border connection, and the incentive-claim, metering and verification file; and
• planning the eventual exit or monetisation — a platform or asset sale, an InvIT route, an IPO or an institutional stake sale — and the repatriation of returns, so the holding structure is built for it.

ATB advises foreign investors and corporate buyers entering Indian renewable energy and green hydrogen, and matches the structure to the business — generation developer, corporate power buyer, hydrogen or ammonia producer, or equipment manufacturer. We work the project SPV, manufacturing company or procurement structure and the route; the offtake, whether a SECI or state PPA, a SIGHT award and buyer, or a captive or open-access arrangement; the land, evacuation, grid-connectivity and transmission-waiver position; the forecasting, deviation and storage exposure; the eligibility under the SIGHT and PLI incentives; and the transfer-pricing, contract and incentive-claim file around it. The conversion point is the same across the sector: the value lies in structuring the project or the procurement so the offtake, the land, the grid position, the incentive and the compliance all work together. For groups also entering the Gulf, the structure is designed across the India-UAE corridor.