The Renewable Energy (RE) potential in India is 8,89,508 Mega Watt. The Government of India, in pursuit of energy security and for minimizing impact on environment, has been prioritizing the development of RE sector through its policies and programmes. In this context, the performance audit of the RE sector was conducted to primarily assess the extent to which contribution of RE to the energy mix in the country had increased and whether RE had succeeded in improving access to electricity in the remote and rural areas. The performance audit revealed that the exploitation of the two largest components i.e. solar energy and wind energy potential was only 0.35 and 21 per cent, respectively and varied significantly across States. Audit observed that while the overarching policy and incentives offered by the Government of India to promote RE remained uniform for the country, the varied development of the sector in States was a result of State specific factors such as the State’s RE development policy, the State tariff regime and the conduciveness of the State’s implementation environment. Inadequate evacuation and transmission infrastructure was a bottleneck. Problems in maintaining grid stability caused by infirm and variable nature of wind energy remained unaddressed. Renewable Purchase Obligation mechanism designed as a policy instrument to demonstrate commitment and create a demand incentive for the development of RE resources in India, had not been effectively enforced.