LG India Powers Factories With 25-Year Solar Pacts

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AuthorVihaan Mehta|Published at:
LG India Powers Factories With 25-Year Solar Pacts
Overview

LG Electronics India has signed 25-year solar power agreements with Hinduja Renewables and Sunsure Energy to power its Greater Noida and Pune factories. The deal, marking LG's first equity investment in an Indian power generation company, will generate over 3.2 crore units of clean electricity annually, boosting its sustainability goals.

LG India Powers Factories with 25-Year Solar Agreements

LG Electronics India (LGE India) is set to power its Greater Noida and Pune manufacturing facilities with clean energy after signing long-term solar Power Purchase Agreements (PPAs) for 25 years. These agreements with Hinduja Renewables Energy Private Limited (HREPL) and Sunsure Energy will generate over 3.2 crore units of clean electricity annually.

Key Agreements Signed

LG Electronics India has entered into significant long-term solar Power Purchase Agreements (PPAs) with two renewable energy providers: Hinduja Renewables Energy Private Limited (HREPL) and Sunsure Energy.

These agreements, effective from Q2 CY2026, are for a duration of 25 years and will supply renewable energy to LGE India's manufacturing facilities in Greater Noida and Pune.

The HREPL PPA covers a 9.80 MWp capacity for the Pune plant, supplying approximately 1.61 crore units annually. Sunsure Energy will provide an 11 MWp capacity for the Greater Noida facility, generating around 1.6 crore units per year.

This initiative marks LGE India's first equity investment in a dedicated power generation entity (SPV) and is projected to offset approximately 0.61 million metric tonnes of CO2e over the project's lifetime.

Significance of the Deals

This move significantly accelerates LGE India's transition towards sustainable manufacturing practices and clean energy adoption, aligning with LG's global commitment to environmental stewardship.

It supports India's national ambition to achieve net-zero emissions by 2070 and enhances the company's efforts to reduce its carbon footprint by integrating renewable energy into its core production ecosystem.

The agreements signify a proactive approach by LGE India to manage energy costs and secure a stable supply of green power, crucial for large-scale manufacturing operations.

Background and Global Goals

LG Electronics globally joined the RE100 initiative in 2023, pledging to achieve 100% renewable electricity usage across all its business sites by 2050. The company has set interim targets to reach 60% renewable energy by 2030 and 90% by 2040.

As part of this global strategy, LG has been implementing various measures, including on-site solar installations and PPAs. In India, LG has previously installed solar panels on its Greater Noida office rooftop.

India itself is actively pursuing renewable energy expansion, aiming to reduce its reliance on fossil fuels and meet its climate targets, including a net-zero ambition for 2070.

Operational Impact

  • Energy Transition: LGE India's manufacturing operations will increasingly rely on solar energy, reducing dependence on conventional power sources.
  • Carbon Footprint Reduction: The company will significantly cut its Scope 2 emissions, contributing to its sustainability goals.
  • Financial Structure: LGE India makes its first strategic equity investment in an Indian power generation SPV, potentially offering new financial models for energy procurement.
  • Operational Stability: Secures a long-term supply of electricity, helping to mitigate energy price volatility for its manufacturing sites.

Risks to Watch

LG Electronics India has faced recent tax and customs disputes. In January 2026, Mumbai Customs issued an order demanding ₹27.40 crore in differential duty and ₹46.70 crore in penalties over alleged misuse of duty exemptions on digital signage imports. Additionally, in March 2026, the company received a GST demand of ₹7.98 crore for FY 2019-20 related to input tax credit claims, and a draft Income Tax assessment order for FY 2022-23 proposing ₹572.8 crore in disallowances, including transfer pricing adjustments.

While LGE India stated it plans to appeal these orders and expects no immediate financial or operational impact, these ongoing legal challenges remain a point of attention for stakeholders.

Competitive Landscape

Major competitors are also prioritizing renewable energy. Samsung India, for instance, has secured a 25-year PPA for 100% wind power for its Noida manufacturing site, set to begin in H2 2025. Samsung has also transitioned its Noida plant from diesel to natural gas generators for sustainability.

Dixon Technologies, another key player in India's electronics manufacturing sector, focuses on environmental sustainability with energy-efficient practices and has installed solar panels on over 60% of its facilities.

Key Project Metrics

  • Total Annual Clean Electricity Generation: Over 3.2 crore units.
  • PPA Duration: 25 years.
  • Projected CO2e Offset (Lifetime): Approximately 0.61 million metric tonnes.

Looking Ahead

  • The official commencement of the 25-year PPAs in Q2 CY2026.
  • The impact of these agreements on LGE India's overall energy costs and operational expenses.
  • Progress on LG's global RE100 targets and India's net-zero 2070 ambition.
  • The resolution and outcomes of the ongoing tax and customs disputes faced by LG Electronics India.
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