India’s commitment to reach net-zero emissions by 2070 and source half its electricity capacity from non-fossil sources by 2030 marks a shift in development strategy. It signals an attempt to bypass the carbon-intensive path followed by industrial economies. The constraint is not ambition. It is delivery in a system where energy access remains uneven. India has already reported that non-fossil sources reached 50% of installed power capacity in June 2025, ahead of the 2030 target, but capacity does not automatically translate into reliable supply for poorer households.
Energy poverty persists despite the expansion of generation capacity. It reflects the inability of households to secure reliable, affordable, and clean energy for basic needs. This is not a marginal issue. It cuts across India’s urban transition, where population pressures, informal settlements, and weak last-mile infrastructure strain access.
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Rising energy costs deepen this stress. The burden falls disproportionately on low-income households, especially in informal urban clusters. Limited grid access, upfront costs of clean energy systems, and weak financial inclusion reinforce exclusion. The transition to cleaner energy risks bypassing these groups unless affordability is addressed directly.
India’s energy demand will continue to rise with income growth, urbanisation, electrification, and industrial expansion. Meeting this demand while aligning with net-zero goals requires a structural shift towards low-carbon sources. Policy announcements such as rooftop solar expansion and emissions intensity reduction targets indicate direction. Execution remains uneven.
Access to clean energy also intersects with gender. Women bear a disproportionate share of energy-linked burdens, including time spent on water and fuel collection. Initiatives such as Barefoot College show that decentralised renewable systems can alter household economics by training women as solar engineers. The gains extend beyond electricity access to income, agency, and community resilience.
Determinants of energy poverty in India
Infrastructure gaps: Grid access has improved, but reliability and last-mile connectivity remain uneven in rural and tribal regions. Decentralised solar solutions are expanding, but scale, maintenance, and local institutional capacity remain constraints.
Affordability constraints: Households continue to rely on biomass and other traditional fuels because cleaner options involve upfront costs. Subsidy design, credit access, and predictable financing mechanisms are critical to enabling transition.
Regional disparities: Energy access varies sharply across states and geographies. Remote, hilly, and sparsely populated regions face higher delivery costs and weaker infrastructure, widening the access gap.
Social and cultural factors: Energy use is shaped by local practices, resource availability, and community structures. These factors often slow the shift from traditional fuels to cleaner sources.
Consumption capacity: Higher household expenditure correlates with better access to modern energy. Income constraints translate directly into energy deprivation.
Awareness and uptake: Awareness of clean energy schemes affects adoption. Education indirectly influences uptake through access to information, paperwork, and state programmes.
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Energy poverty and the rural-urban divide
The Household Energy Poverty Index, based on NSSO data cited in the draft, shows wide variation across states. Lower index values indicate better outcomes. Several states continue to record high energy deprivation across access, affordability, and quality of supply.
The rural-urban divide remains pronounced. Urban households usually have better access to electricity, cleaner fuels, and distribution infrastructure. Rural households face constraints across all three dimensions: availability, affordability, and reliability. The gap is not merely about connection. A household may be connected to the grid and still face poor supply quality, high effective costs, and limited access to clean cooking fuel.
This is where the energy poverty debate must move beyond electrification statistics. India has made significant progress in connections. The harder test is whether electricity is dependable, affordable, and clean enough to support education, livelihoods, small businesses, and household welfare.
Tariffs and DISCOM finances shape energy access
Energy poverty is also shaped by the political economy of electricity pricing. India’s distribution system relies heavily on cross-subsidies. Industrial and commercial consumers often pay higher tariffs to subsidise households and agriculture. This keeps some consumer tariffs low, but it creates a second-order cost. High power tariffs weaken industrial competitiveness, while under-recovery of costs leaves distribution companies financially fragile.
This matters for poorer households because weak DISCOM finances translate into poor service quality. Loss-making distribution companies delay payments, underinvest in networks, and struggle to modernise feeders, meters, and local infrastructure. The result is familiar: supply interruptions, voltage fluctuations, delayed repairs, and poor grievance redressal. These failures hit low-income settlements and rural areas hardest.
The Union government’s Revamped Distribution Sector Scheme recognises this link. It aims to reduce aggregate technical and commercial losses to 12-15% and bring the average cost of supply–average revenue realised gap to zero by improving DISCOM efficiency and financial sustainability. Recent official data show progress: AT&C losses fell from 22.62% in FY2013-14 to 15.04% in FY2024-25, while the ACS-ARR gap narrowed from ₹0.78 per kWh to ₹0.06 per kWh. Distribution utilities also reported a profit of ₹2,701 crore in FY2024-25 after years of losses.
These improvements are important, but they do not remove the structural constraint. State-level tariff decisions, delayed subsidy payments, and uneven operational capacity still influence whether consumers receive reliable supply. For energy-poor households, the question is not only whether electricity is subsidised. It is whether the subsidy is fiscally sustainable, whether the DISCOM can maintain the network, and whether tariff reform protects the poor without penalising productive users.
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Policy gaps and uneven outcomes
Energy poverty is not only an infrastructure problem. It is also a distribution, pricing, and institutional capacity problem. States such as Assam, Bihar, and Jharkhand show persistent deficits in access and affordability. Policy responses remain fragmented across subsidies, infrastructure expansion, and awareness programmes.
Schemes such as PM Surya Ghar Muft Bijli Yojana attempt to address affordability by subsidising rooftop solar systems. The scheme provides 60% subsidy for systems up to 2 kW and 40% of the additional system cost for systems between 2 kW and 3 kW, with the subsidy capped at 3 kW. At benchmark prices, this translates into ₹30,000 for 1 kW, ₹60,000 for 2 kW, and ₹78,000 for 3 kW or higher systems.
The design targets small consumers, but uptake will depend on credit, roof ownership, DISCOM processes, vendor quality, and local awareness. Poor households in rented homes, informal settlements, and congested urban areas may not be able to benefit from rooftop solar even when subsidies exist. This is why decentralised renewables must be paired with distribution reform, community-level models, and targeted public finance.
India’s clean energy transition cannot be assessed only through capacity additions or emissions targets. It must be measured against access outcomes. Without addressing affordability, regional disparities, and DISCOM viability, the transition risks widening inequality. Energy access, not just energy supply, will determine whether the net-zero pathway is inclusive. The core test is whether clean energy reaches the households that are least able to pay upfront, least able to navigate subsidy systems, and most exposed to unreliable supply.
Ashraf Rehman is an independent researcher and columnist from North East. He is a Fellow at The Green Institute.