Grid infrastructure delays led to the wastage of 1,835 million units of renewable energy in July and August 2026. This disconnect between rapid generation growth and transmission capacity creates revenue risks for developers. Investors should track the implementation of the recently launched INR 1.86 trillion PM-Dhara scheme to see if it eases these operational pressures.
India’s rapid expansion in renewable energy is running into a significant practical hurdle: the grid is not yet ready to handle the surge in supply. In July and August 2026, the country witnessed the wastage of 1,835 million units of clean electricity. This phenomenon, known in the industry as curtailment, meant that 1,462 million units of solar power and 373 million units of wind power could not be sent to the grid, even though there was demand for the electricity. For solar projects specifically, this accounted for about 4.2% of total generation during those two months.
Financial Impact on Developers
For investors, this wastage represents a direct risk to revenue. When a power plant is ready to produce electricity but the transmission line cannot carry it, the developer cannot sell the power. Under many existing long-term contracts, there is limited clarity on compensation for this lost income. While companies continue to build solar and wind farms to meet national targets, relying on temporary or insufficient grid access can hurt project returns. If the electricity cannot be transmitted, the project essentially sits idle, leading to lower cash flows than what investors might expect from original financial projections.
Infrastructure Lag vs. Capacity Addition
The root cause of this wastage is that transmission infrastructure is not being built as fast as the generation capacity. As of mid-2026, about one-third of newly commissioned renewable projects are facing some form of grid connectivity issue. Developers often find themselves in a position where their plant is completed, but the local grid or the high-voltage transmission lines are not ready to evacuate the power. This creates a bottleneck that limits how much of the new capacity is actually used.
Policy Response: The PM-Dhara Scheme
To address these gaps, the government launched the PM-Dhara scheme on September 30, 2026, with a massive outlay of INR 1.86 trillion. The goal of this program is to speed up the construction of transmission lines and storage solutions specifically to help integrate renewable power into the national grid. This is a crucial intervention, as building battery storage alone is often too expensive to fix the entire problem. The focus is shifting toward better planning to ensure that transmission lines are ready before new solar or wind plants come online.
What Investors Should Monitor Next
The most important monitorable for investors is the speed at which the PM-Dhara scheme projects are executed. Investors may look for companies that are directly involved in the transmission and distribution space, as their order books could see growth. Conversely, for pure-play renewable energy generators, the key will be to track how much of their capacity is affected by grid constraints and whether any new regulatory frameworks will provide compensation for wasted power. As the sector matures, the ability of a company to ensure its projects have guaranteed, stable grid access will become a critical differentiator in financial performance.