Kerala has announced plans to add 1 GW of utility-scale solar projects and solar parks across the state by 2030 as part of its Draft Power Policy, 2025. It also aims to install a capacity of 2.5 GW through decentralized solar initiatives and develop 1.5 GW from non-solar renewable sources.

Kerala’s transmission infrastructure will be significantly upgraded to accommodate the expected surge in renewable energy generation and handle a peak load of up to 10 GW by the decade’s end.

The Kerala State Electricity Regulatory Commission estimated an investment requirement of ₹522.38 billion (~$6.01 billion) by 2030 to upgrade energy infrastructure and integrate renewable energy sources effectively.

Mandatory Rooftop Solar

A key feature of the policy is the introduction of mandatory rooftop solar installations for specific consumer categories. Commercial establishments occupying over 100 sq m must install rooftop solar systems with a minimum capacity of 3 kW. Those with more than 400 sq m of space must install systems of at least 5 kW.

On the residential side, households with a monthly electricity consumption exceeding 500 units and roof areas over 100 sq m must install rooftop solar systems with a minimum capacity of 1 kW.

The policy also permits a variety of business models, including capital and operating expenditure, lease, utility-owned, roof rental, and build-own-operate-transfer models.

If installed within a consumer’s premises, ground-mounted solar systems of up to 1 MW capacity will be eligible for the same benefits as rooftop systems.

Rooftop solar systems below 500 kW will no longer require inspection or approval by the electrical inspectorate. Net metering will remain available for all eligible consumers until the renewable purchase obligations are fulfilled, provided the project capacity remains up to 1 MW.

The policy also highlights the critical role of energy storage in ensuring a reliable and resilient power supply. Battery energy storage systems (BESS) are proposed as an interim but essential solution to meet the state’s immediate and future energy storage requirements. By 2030, it is estimated that Kerala will require approximately 2 GW/4 GWh of storage capacity to stabilize the grid and manage peak demand.

All new renewable energy projects, including solar and wind, must integrate storage systems into their design. A minimum of 10% of the total installed capacity of these projects must be allocated for BESS, with the possibility of increasing this requirement as technologies and needs evolve.

According to Kerala State Electricity Board estimates, peak hour electricity demand in the financial year 2031 is projected to reach 7 GW even under a business-as-usual scenario. However, the state could face a shortfall of around 2.6 GW during evening peak hours. The deficit in total energy content is expected to reach approximately 15,000 million units (MU).

Under a business-as-usual scenario, Kerala’s annual electricity requirement is forecasted to rise to 38,000 MU by 2030, 52,000 MU by 2040, and 71,000 MU by 2050. The energy requirement could be up to 70% higher in a carbon-neutral scenario.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.