Why did India's power consumption grow only 1% in CY25?

Above-normal monsoons significantly reduced cooling demand, leading to the slowdown in power consumption growth during CY25.

What will drive India's electricity demand in CY26?

Data centers, electric vehicles, green hydrogen, and a rebound in cooling demand are expected to drive electricity consumption in CY26.

What challenges are affecting India's solar power generation?

Operational bottlenecks, including land acquisition, PPA delays, and extended monsoon periods impacting irradiation, are affecting solar power generation.

Home / Business and Economy / India's Power Demand Surge Expected in 2026

India's Power Demand Surge Expected in 2026

5 Jan

•

Summary

Power consumption growth slowed to 1% in CY25 due to heavy monsoon rains.
Data centers, electric vehicles, and green hydrogen will drive future demand.
Solar capacity additions hit a record 40 GW in CY25, but generation faced challenges.

India's Power Demand Surge Expected in 2026

India's electricity consumption experienced a notable slowdown in calendar year 2025, with growth decelerating to 1% compared to 5% in the previous year. Extended and heavy monsoon rainfall significantly reduced cooling demand across northern regions and impacted industrial and agricultural electricity usage. This period is viewed as a consolidation phase after several years of robust expansion.

Projections indicate a recovery in electricity demand for calendar year 2026. This upturn is expected to be driven by a normalization of weather conditions, leading to increased cooling requirements. Furthermore, emerging sectors such as data centers, electric vehicles, and green hydrogen are poised to become substantial new demand drivers, alongside expansion in formal office spaces.