India Achieves Cost-Effective Solar+Storage Solutions for Industries
Significant Breakthrough in Solar Energy Costs
New Delhi, June 3: Union Minister for New and Renewable Energy, Pralhad Joshi, announced on Tuesday that the cost of solar energy combined with storage in India has become more affordable than industrial electricity rates in most states, as revealed by a recent study.
He described this development as a transformative moment for India's industrial sector, emphasizing its alignment with Prime Minister Narendra Modi's vision for sustainable economic growth.
According to research conducted by the India Energy and Climate Center (IECC) at the University of California, Berkeley, India can now provide continuous electricity at rates below Rs 6 per kWh, which is cheaper than coal-based power and insulated from inflation for the next 25 years.
The study, titled ‘Plummeting Solar+Storage Auction Prices in India Unlock Affordable, Inflation-Proof 24/7 Clean Power', indicates that battery storage costs have decreased by over 50% in the past 18 months, making the combined cost of solar and storage lower than that of new coal-fired plants.
Dr. Nikit Abhyankar, the study's author and a faculty member at the University of California, noted that solar plus storage is now more economical than industrial electricity tariffs in most regions, with these prices secured for decades.
India's competitive advantage is attributed to significantly lower capital costs for solar installations, which are about one-third of those in the United States, coupled with declining battery prices that are now comparable to those in China. Dr. Amol Phadke, co-author of the study, stated that with battery pack prices falling below $60 per kWh, India is successfully replicating its solar achievements in the storage sector.
The report highlights that India's average industrial electricity tariffs are projected to reach nearly Rs 8 per kWh by 2025, with further increases anticipated. In contrast, solar plus storage systems offer fixed-rate electricity for 25 years, ensuring predictable and lower-cost clean energy for industries. Even when accounting for transmission fees, these systems remain financially viable for industrial consumers.
India's solar energy capacity has surged dramatically over the past 11 years, increasing from just 2.82 GW in 2014 to an impressive 105.65 GW as of March 31 this year, according to official statistics.
A senior official remarked that solar energy has become the cornerstone of India's renewable energy initiatives.
The total installed solar capacity of 105.65 GW includes 81.01 GW from ground-mounted systems, 17.02 GW from rooftop installations, 2.87 GW from hybrid project components, and 4.74 GW from off-grid systems. This growth reflects a strong adoption of solar energy across both utility-scale and distributed categories.
The expansion of solar power generation capacity has been supported by a robust domestic production of solar cells and wafers, which were nearly nonexistent in 2014. India has now established a solid foundation with 25 GW of solar cell production and 2 GW of wafer production.
As part of the country's commitment to reducing its carbon footprint in the battle against climate change, Prime Minister Narendra Modi has set an ambitious target of achieving 500 GW of renewable energy capacity by 2030.