India’s power sector seems to be at an inflexion point. Data Centres are not only consuming electricity, but it is also reshaping how it gets distributed.
Adani Energy Solutions has approached the Uttar Pradesh Electricity Regulatory Commission for a parallel electricity distribution licence to serve a data centre park in Noida. Something very similar happened a couple of months ago when Andhra Pradesh gave India’s first such licence to Google for its 1 GW data centre hub in Visakhapatnam.
But this comes at a cost. Renewable energy developers, still recovering from delayed payments and stalled transmission projects, are now asking the government for a Rs 30,000 crore relief package. They want bridge financing, a moratorium on loan repayments, and more time to repay debt without penalties.
On a global level, the US has slapped a 15% tariff on polysilicon imports. China is taxing older solar cell tech to push manufacturers toward newer technology. Lithium prices have dropped 30% from their May peak. Each of these moves will ripple into India’s solar supply chain in the months ahead.
In fact, the first week of August witnessed some key developments globally. How would these impact the growth of the renewable power sector in India:
Power demand rises amid data centre expansion
According to a report by brokerage house JM Financial, the average daily energy consumption during the first week of August stood at 5,237 MU. Peak solar demand touched 245 GW, while non-peak solar demand reached 240 GW, marking a 7% increase year-on-year. The report noted a maximum deficit of 225 MW during non-solar hours, against no deficit during solar hours.
This shows that the supply is more or less keeping pace with the demand for now, even as data centres and industries add a fresh load to the power grid of the country.
Solar cell imports put India’s supply chain under scrutiny
The report also noted that the government has ordered a probe into a sharp rise in solar PV cell imports from Ethiopia, on suspicion that these are being used to get around the Chinese tariffs. According to the report, solar cell imports from Ethiopia rose from zero to $202 million in FY26. This accounted for 81% of all imports from that country.
Separately, the government is preparing a production-linked incentive scheme for polysilicon manufacturing in order to cut India’s import dependence.
In the auction market, the Solar Energy Corporation of India discovered a tariff of Rs 5.25 per kWh in a 1,000 MW firm and dispatchable renewable energy auction structured to mimic thermal power, with minimum demand fulfilment ratios set at 90% during peak hours, 80% during off-peak hours, and 90% annually.
Renewable energy developers seek government relief
Furthermore, the report also noted that renewable energy developers have sought a relief package of up to Rs 30 billion from the government. The demands include concessional bridge financing, a moratorium on principal repayment for periods when transmission has been delayed, and an extension of loan tenures without penalties.
China, US policy shift reshape global solar supply chains
Elsewhere, China’s overall solar exports fell for a second straight month after Beijing let a tax rebate on shipments lapse in April, even as its sales to Southeast Asia jumped by a third in June.
Beijing has also moved to tax older, conventional silicon cell technology while leaving newer perovskite and tandem cell technology untaxed, a step that could push global manufacturers, including buyers in India, toward next-generation panels sooner than planned.
Separately, China has directed solar PV manufacturers to stop below-cost competition and shift focus to product quality, part of a wider campaign against what Beijing calls “involution-style” competition. Eight leading Chinese polysilicon makers have since signed a binding agreement to rein in price competition.
In the United States, President Trump has announced 15% tariffs on polysilicon imports effective December 4, along with minimum prices for polysilicon and its derivatives, in a move aimed at reshaping the domestic solar sector, as per the report.
Germany, meanwhile, is working on a 2027 overhaul of its renewable energy incentives, shifting the focus from how much electricity wind and solar farms generate to how well that power helps balance the grid.
According to the report, lithium prices have fallen to a five-month low, down 30% from May’s high, as major mines in China and Australia resume production and concerns grow over a global supply surplus.
What lies ahead for India’s renewable energy sector
India’s power sector is being pulled in two directions at once, surging demand from data centres and industry, and a renewable ecosystem still finding its financial footing. Whether the sector can keep up will hinge on decisions still playing out, from state regulators weighing private distribution licences to New Delhi’s push for a domestic solar supply chain.