“Clean energy is the need of the hour. Prime Minister Narendra Modi’s words—Our commitment to a better tomorrow is paramount and is reflected in our work—capture the spirit driving India’s green energy mission. As the nation advances towards its bold renewable targets, the vision of a ‘healthier future’ is now being defined not just by ecological preservation but also by principles of social equity and responsible governance.
India stands at a pivotal point in its energy transition. With an aim to achieve 500 GW of non‑fossil capacity by 2030 and net zero by 2070, progress is accelerating. By December 2024, the total installed capacity reached 462 GW, with renewables, including hydro, contributing 209.45 GW—almost 45% of the total. Yet, true sustainability extends beyond megawatt milestones and carbon reduction; it calls for ESG values to be interwoven into every layer of renewable energy planning and execution.
Shifting Paradigm Towards Integrated Model
Major changes are underway, marked by a shift from rigid techno-economic structures to comprehensive models that focus on community needs and social equity. This shift offers the potential for a fair energy transition that is accessible to all. At the heart of this changing environment is the increasing importance of ESG (Environmental, Social, and Governance) factors. ESG evaluates corporate performance based on environmental, social, and governance standards and is emerging as a crucial perspective for investment choices. In the renewable energy industry, this means that it is essential to look beyond just the clear climate benefits of low-carbon energy production.
In India, the social aspect—the “S” in the ESG framework—holds especially great importance. An energy transition is truly fair only when no community is left behind. Large solar and wind installations demand extensive land, often triggering risks such as disputes, community displacement, and loss of livelihoods. Prioritizing the needs of affected communities is therefore not merely an ethical stance but a practical measure to avoid operational setbacks and reputational damage. As the Council on Energy, Environment and Water aptly observes, deployment strategies that respect social value help build the “social licence” companies need to operate without persistent public resistance.
The Rise of Community-Led Renewable Energy (CLRE)
Simultaneously, the established, hierarchical model of energy deployment is being incrementally supplanted by Community-Led Renewable Energy (CLRE) paradigms. Within this governance structure, local community members gain substantial equity stakes in project ownership, retain influence over operational decisions, and receive a fair share of the revenue produced. Innovations such as community solar gardens, village microgrids, and biomass cooperatives illustrate this shift. This enables communities to have control over energy production and consumption while generating income that supports local economies. As a result, CLRE models address the social risks highlighted by ESG assessments. They also redefine value creation to guarantee that economic, environmental, and social outcomes are aligned at the community level.
This represents a significant change from a conventional model where communities act as passive recipients of outside interventions to one where they are engaged stakeholders in their own development. The upward trend in renewable energy adoption within the commercial and industrial sector further underscores this shift; corporate renewable capacity grew by 5% in the third quarter of 2024 alone, contributing an additional 2,011 MW and raising the cumulative total to 41,727 MW.
Benefits of a Community-Centred Model
The benefits of a community‑centred model are both wide‑ranging and mutually reinforcing. Economically, it creates employment opportunities at multiple skill levels, from construction through long‑term maintenance. Local ownership enables part of the revenue from electricity sales to stay within the region, fuelling investments in education, healthcare, and essential infrastructure. Socially, such a model fosters a sense of shared responsibility and pride, strengthening community bonds and enhancing project longevity. Environmentally, initiatives shaped with local participation can be aligned with regional ecological realities, reducing potential harm to natural systems.
Government Initiatives for Inclusive Energy Transition
The Government of India has recognised that a socially inclusive energy transition is essential for sustainable development, leading to the launch of various initiatives to put this principle into action. For instance, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act of 2013 mandates that consent must be obtained from a significant majority of families impacted by land acquisition for both private enterprises and public-private partnership projects.
In addition, the Act establishes the Social Impact Assessment, a structured process that measures the expected impacts of land acquisition on the socio-economic and cultural aspects of the affected community. Such measures not only safeguard community rights but also build trust and legitimacy around large‑scale renewable projects.
Moreover, initiatives such as the PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan) represent a significant advancement in renewable energy policy. This programme aims to deploy 10,000 megawatts of distributed solar power infrastructure, supply 1.4 million standalone off-grid solar irrigation pumps, and solarise 3.5 million existing grid-connected agricultural pump sets. Collectively, these components enhance the geographical spread of solar energy while also bolstering the energy resilience of farming communities.
At the same time, the government’s push for rooftop solar is gaining momentum. The PM Surya Ghar: Muft Bijli Yojana, backed by an allocation of over ₹75,000 crore, aims to install solar systems on 10 million rooftops. Under this scheme, each participating household is assured 300 kilowatt‑hours of free electricity per month, adding an estimated 30 gigawatts of capacity to the residential solar sector.
Looking ahead, India’s green energy trajectory will depend as much on the embedding of Environmental, Social and Governance (ESG) metrics as on the scaling of megawatt-hours. When renewable energy projects adopt a community-first orientation, the energy transition ceases to be a narrow technological and financial calculation and is recast as a broad-based socio-economic uplift.
By centering the needs and aspirations of local populations, the country can distribute the gains of clean energy equitably, cultivate a shared stewardship of resources, and reduce the risks of social license erosion. This focus ensures that the journey to net zero uplifts those who live closest to the change. Therefore, the true measuring rod of India’s energy revolution will be the resilience and prosperity of its towns and villages, not the sheer volume of power on the grid.
Views of the author are personal and do not necessarily represent the website’s views.
The above article has been written by Narayan Kumar, CEO, Kshema Power. He leads the company’s strategic direction, growth initiatives, and performance culture. With over three decades of leadership experience in the renewable energy and telecom sectors, including senior roles at Vestas and Acciona, he brings a unique blend of operational expertise and people-centric leadership. Known for fostering a culture of accountability and customer focus, Narayan is deeply committed to delivering stakeholder value and driving sustainable growth in the clean energy space. He holds an MBA from Pondicherry University, along with executive credentials from MIT Sloan School of Management and certifications in innovation and entrepreneurship from edX and MIT Sloan Executive Education.