Chapter 5

Environmental and Social Impact of Renewable Energy Policy on

the Indian Power Sector (2014-2024)
Introduction

India's rapid development over the past decade has brought with it increased energy
demands, driving the nation to search for more sustainable and environmentally friendly
energy sources. The Government of India has launched various renewable energy (RE)
policies over the past ten years, aiming to not only meet the growing energy demand but
also to address global climate change concerns. As a major signatory to the Paris Agreement
(2015) and a participant in global climate dialogues, such as COP21, India’s renewable
energy initiatives reflect its commitment to a sustainable and low-carbon future.

The integration of renewable energy into India’s power grid has significantly impacted the
nation’s carbon dioxide (CO₂) emissions, provided critical employment opportunities in the
RE sector, and contributed to the nation’s international climate commitments. This chapter
will examine three critical areas of environmental and social impact: emission reductions,
sustainability, and job creation in the RE sector. Using a data-driven approach and
referencing reports from central ministries, industry resources, and state-specific data, we
will explore how RE policies have reshaped the Indian power sector and contributed to the
national goal of a sustainable and inclusive energy transition.

Approach: This chapter provides a comprehensive analysis of each sub-topic using data
tables and visualizations to illustrate key trends. Information has been sourced from central
government reports, such as those from the Ministry of Power (MoP), Ministry of New and
Renewable Energy (MNRE), and India Brand Equity Foundation (IBEF). Where applicable,
state-level insights are included to provide a granular understanding of the impact across
regions. This chapter concludes with a discussion on the future outlook of RE policies and
their role in India’s sustainability journey.
5.1 Emission Reductions: Impact of RE Policies on CO₂ and Greenhouse Gas
Emissions

5.1.1 Impact of Renewable Energy on CO₂ Emissions

The shift from fossil fuel-based power generation to renewable energy has played a
significant role in reducing CO₂ emissions in India. In 2014, coal-based power plants
accounted for approximately 70% of India’s electricity generation, emitting vast amounts of
CO₂ and other harmful gases. Over the past decade, renewable energy capacity, particularly
from solar and wind, has significantly expanded. By 2024, RE sources accounted for over
30% of India's installed power capacity, reducing the share of fossil fuels and subsequently
lowering emissions.

According to the International Energy Agency (IEA), India’s renewable energy capacity has
helped avoid approximately 500 million tons of CO₂ emissions annually as of 2024. Solar
power alone has contributed to significant emission reductions due to its rapid adoption
under the National Solar Mission and state-specific solar policies.

CO₂ Emissions Avoided (in

Year RE Capacity (in GW)
Million Tons)
2014 50 30
2018 200 75
2024 500 173

Source: MNRE, IEA

5.1.2 State-Wise Emission Reduction

Different states have contributed varying levels of CO₂ reduction depending on their
renewable energy capacity. States with high solar and wind potential, such as Rajasthan,
Gujarat, and Tamil Nadu, have achieved significant emission reductions by deploying large-
scale solar and wind projects. Rajasthan, for instance, leads in solar capacity with
approximately 14 GW installed as of 2024, which has offset an estimated 20 million tons of
CO₂ annually.

CO₂ Emissions Offset

State Key Renewable Source
(Million Tons)
Rajasthan 20 Solar
Gujarat 15 Solar & Wind
Tamil Nadu 18 Wind
Maharashtra 10 Solar
Karnataka 12 Solar & Wind

Source: MNRE, State Energy Reports

5.1.3 Comparative Analysis with Conventional Energy Emissions

A comparative analysis shows that conventional coal-based power plants emit an average of
0.8-1.0 kg of CO₂ per kWh of electricity generated. In contrast, solar and wind energy
produce zero emissions during operation, highlighting the environmental benefits of shifting
to renewables. This shift not only supports India’s climate goals but also aligns with the UN
Sustainable Development Goals (SDGs).

5.2 Sustainability: Contribution of RE Policies to India’s International Climate

Commitments

5.2.1 India’s International Climate Commitments

India’s renewable energy policies align with its international climate commitments under
the Paris Agreement and other climate frameworks, such as COP21. At COP21, India
pledged to reduce its emissions intensity by 33-35% from 2005 levels by 2030 and to
achieve 40% of its installed power capacity from non-fossil fuel sources by 2030. With
significant investments in solar and wind energy, India achieved 40% non-fossil fuel capacity
in 2021, nine years ahead of schedule.

The government’s commitment to the Nationally Determined Contributions (NDCs) under

the Paris Agreement has also catalysed RE policy implementation, which is reflected in
various programs such as the National Solar Mission and Green Energy Corridor Project.
These initiatives promote the integration of RE sources into the national grid, thereby
ensuring a sustainable and resilient power sector.

5.2.2 State Contributions to National Climate Goals

States play a critical role in supporting India’s climate goals through state specific RE
policies. States like Gujarat and Maharashtra have introduced their own solar policies and
Renewable Purchase Obligations (RPOs) to accelerate RE adoption. Tamil Nadu, with its
focus on wind energy, is one of the largest contributors to India’s wind capacity, supporting
the achievement of national targets.

RE Capacity Target
State Current Capacity Primary Source
(2024)
Gujarat 25 GW 20 GW Solar
Tamil Nadu 15 GW 12 GW Wind
Maharashtra 20 GW 10 GW Solar & Wind
Karnataka 15 GW 11 GW Solar

Source: MNRE, State RE Policies

5.2.3 Role of Policy Mechanisms in Achieving Sustainability

The success of India’s sustainability efforts is also attributable to policy mechanisms such as
Renewable Energy Certificates (RECs) and Renewable Purchase Obligations (RPOs). The
RPO mandates that discoms procure a certain percentage of power from renewable
sources, promoting clean energy adoption across sectors.

Another impactful policy is the Production Linked Incentive (PLI) Scheme for solar
manufacturing, which aims to create a robust manufacturing ecosystem for solar modules,
thereby reducing import dependency and ensuring sustainability across the supply chain.

5.3 Job Creation: Employment Generation in the RE Sector vs. Conventional

Energy

5.3.1 Growth of Employment Opportunities in the RE Sector

The expansion of renewable energy in India has contributed significantly to job creation. The
RE sector’s labour-intensive nature, particularly in areas like installation, maintenance, and
manufacturing, has created thousands of jobs. According to the International Renewable
Energy Agency (IRENA), the Indian RE sector employed over 1 million people as of 2023,
with solar and wind energy being the largest employers.

Jobs Created Jobs Created

Sector Key Activities
(2014) (2024)
Solar 50,000 700,000 Installation, Maintenance
Wind 30,000 200,000 Manufacturing, Operations
Biomass & Hydro 20,000 100,000 Operations, Maintenance

Source: IRENA, MNRE

5.3.2 Comparison with Conventional Energy Employment

Unlike the RE sector, the conventional energy sector, particularly coal, has experienced a
decline in employment due to automation and a shift towards sustainable energy. For every
MW of solar capacity added, it is estimated that 5-7 full-time jobs are created, compared to
2-3 jobs per MW in coal. This indicates that the RE sector is not only a cleaner alternative
but also a more employment-intensive sector, supporting India’s socioeconomic
development.

5.3.3 State-Specific Job Growth in RE Sector

States such as Gujarat, Tamil Nadu, and Rajasthan have emerged as leading hubs for
employment in renewable energy due to large-scale installations. For instance, Gujarat’s
Dholera Solar Park—one of the world’s largest—has generated thousands of jobs across
construction, operations, and maintenance, contributing significantly to the state’s economy.
Similarly, Tamil Nadu’s wind projects, which are largely rural, have provided sustainable
livelihoods in these communities, illustrating the socio-economic benefits of renewables
beyond urban areas.

State Solar Jobs Wind Jobs Total RE Jobs (2024)

 Gujarat 150,000 20,000 170,000
Tamil Nadu 100,000 50,000 150,000
Rajasthan 120,000 5,000 125,000
Maharashtra 90,000 15,000 105,000
Karnataka 85,000 18,000 103,000

Source: IRENA, MNRE, State Employment Reports

5.3.4 Policy Initiatives Supporting Job Creation in RE

Several policies have fostered job creation in India’s renewable energy sector. The National
Solar Mission has been particularly influential in generating employment across project
phases. Similarly, the Make in India initiative has promoted domestic manufacturing of solar
modules, supporting jobs in manufacturing and R&D. Policies like the Skill India Program
and Green Skill Development Programme (GSDP) by the MNRE provide training for a
renewable-focused workforce, enhancing job quality and ensuring a sustainable supply of
skilled professionals.

Conclusion

The decade from 2014 to 2024 marks a transformative period for the Indian power sector,
driven by renewable energy policies that have delivered substantial environmental and
social benefits. Renewable energy integration has reduced CO₂ emissions, helping India align
with its international climate goals, including the Paris Agreement and COP21. Moreover,
the renewable sector’s employment generation capacity has outpaced that of conventional
energy, contributing to rural economic development and fulfilling socio-economic goals
alongside environmental targets.

Through continued focus on emission reduction, sustainability, and employment generation,

India is poised to achieve a resilient, inclusive, and environmentally sound energy future.