Several States, including Uttar Pradesh, Andhra Pradesh and Rajasthan, have stepped up efforts to promote electric vehicles and green hydrogen by introducing green tariffs, easing access to renewable power and aligning electricity tariffs with solar generation hours, according to a new report, The Hindu BusinessLine reported.
The States’ Electricity Transition report, prepared jointly by the Institute for Energy Economics and Financial Analysis and Ember, reviewed 21 States that together account for 95 per cent of India’s electricity demand.
The study found that Andhra Pradesh, Uttar Pradesh and Rajasthan are leading in creating market conditions that support clean energy adoption. Their progress has been supported by updated renewable energy policies, green tariff mechanisms and solar-hour-aligned time-of-day tariffs.
Uttar Pradesh showed strong growth in electric vehicle adoption, reaching 10 per cent in FY25. The State has set a target of installing 22 gigawatts of solar capacity by FY27. Its green tariff premium for FY26 stands at $0.0041 per kWh (₹0.34 per kWh), lower than the previous year. Uttar Pradesh is also promoting green hydrogen production, with a target of 1 million tonnes by 2028. It has introduced solar-hour-aligned tariffs but may need to accelerate storage capacity additions to ensure a reliable renewable power supply.
Andhra Pradesh was identified as a high performer, supported by its integrated renewable energy policy released in October 2024 and progress in green hydrogen initiatives. The State is deploying smart meters to help roll out solar-hour-aligned tariffs and has adopted the Green Energy Open Access Rules, 2022, with limited waivers on certain charges. Its green tariff premium stands at $0.0083 per kWh (₹0.75 per kWh).
Electric vehicle adoption in Andhra Pradesh reached 6.2 per cent in FY25. The State has 1,440 MW of pumped hydro storage capacity either operational or under construction, strengthening its ability to integrate renewable energy. The report noted that these efforts have attracted investments in storage, green hydrogen and renewable projects.
Rajasthan continues to benefit from a strong renewable energy policy framework and has the lowest green tariff premium among the three at $0.0006 per kWh (₹0.05 per kWh). EV adoption in the State stood at 6.6 per cent in FY25. While Rajasthan has made progress in adopting time-of-day tariffs, it lags in smart meter deployment, which has slowed full implementation. The State currently has only 25 MW of storage capacity, highlighting the need for further expansion to manage peak demand and support renewable integration.
The report also noted that Karnataka, Himachal Pradesh and Kerala have made notable progress in increasing renewable energy use and reducing emissions from the power sector. Meanwhile, Delhi and Haryana were highlighted for strong performance in distributed solar adoption, reliable power supply and overall power sector readiness.The findings suggest that while several States are advancing in the clean energy transition, faster expansion of storage capacity and full implementation of supportive measures will be crucial to sustaining momentum.
