Industry Odisha Bureau, Oct 20: India’s solar power boom is racing ahead of its electricity grid. Transmission and storage bottlenecks could derail its green energy ambition. Midday power prices have even touched zero on exchanges.
India’s solar power boom has been remarkable by any measure. Installed solar capacity stood at about 2.8GW in March 2014. It crossed 100GW in early 2025 and reached 168.04GW by 31 August 2026. Nearly 50GW was added in 2025 alone.
Yet the electricity grid is struggling to keep up. Transmission lines cannot always carry the power produced when the sun is strongest. Storage is too thin to save the surplus for evening use. Operators sometimes order solar farms to cut output, a process called curtailment.
The Jawaharlal Nehru National Solar Mission, launched in January 2010, set the early direction. The Solar Parks Scheme of 2014 then tackled a key bottleneck: land. Parks offered developers shared roads, substations and transmission links. India’s clean energy investment hit $68 billion in 2023. In 2024, about $100 billion, or 83% of power-sector investment, went to clean energy.
The infrastructure, however, has not kept pace. Energy think tank Ember estimates renewable curtailment reached about 470GWh in January–March 2026. Transmission constraints alone caused about 300GWh of that loss. Northern India accounted for 178GWh and western India for 122GWh. The south recorded none, reflecting better alignment between generation and grid expansion. On 30 March alone, India lost 34GWh of clean generation, Ember said.
India met only about 80% of its annual transmission targets over five years, Ember says. The FY27 inter-state transmission target has consequently risen to 25,146 circuit kilometres. Still, Ember expects about 20GW of renewable capacity to face connectivity delays beyond four months. Around 40GW of capacity, mostly solar, also lacks signed power purchase and sale agreements. Lacking storage, it cannot supply evening demand, so distribution companies, or discoms, hesitate. Delays and curtailment hit developers hard, especially when lost output goes uncompensated.
The surplus is also reshaping electricity prices. Developers say solar oversupply peaks between 11am and 3.30pm. This forces discoms into distress sales on power exchanges. Indian Energy Exchange prices fell below ₹0.05 per unit 31 times in April–June 2026. They even touched zero on 1 May. A year earlier, prices dropped that low only six times. “It isn’t a demand problem; it is a grid-balancing and storage problem,” said Sanjeev Aggarwal. He is founder and chairman of renewable power generator Hexa Climate Solutions.
Demand, in fact, keeps climbing. Peak demand hit a record 270.8GW at 3.45pm on 21 May. At 8am that day, it stood at 224.1GW. The grid absorbed an extra 46.7GW in under eight hours. The power ministry expects peak demand to touch 300GW in FY28.
Sanjeev Sanyal and Satvik Dev of the PM’s Economic Advisory Council track the price swings. Prices near zero at midday contrast with evening prices hitting the ₹10-per-kWh cap. The average daily peak-to-trough spread widened from ₹5.27/kWh in 2023 to ₹8.60/kWh in 2026. That is a 63% jump. Such spreads make storing cheap daytime power for evening sale commercially attractive. However, only about 13% of India’s power trades on exchanges; most uses long-term contracts.
Central Electricity Authority (CEA) data show just 8.6GWh of battery storage is operational. Another 42.53GWh is under construction, 38.42GWh is awarded and 65.57GWh is being tendered. Together, that makes 155.12GWh, against a projected need of 236GWh by 2032. Pumped storage plants can also soak up surplus power and release it later. The CEA plans another 100GW of pumped storage capacity by 2035–36.
On 3 September, the CEA proposed two-hour battery systems for new solar and onshore wind. Storage would equal at least 10% of capacity for projects commissioned after 1 July 2027. The rule remains a proposal and could raise project costs. New tenders have slowed as priorities change. Rating agency Icra says awards fell from 47.3GW in FY24 to 14.7GW in FY26.
The Electricity (Amendment) Bill, 2025 proposes promoting contracts for difference (CfDs). Under a CfD, generator and buyer agree a fixed strike price. If market prices fall below it, the buyer pays the gap. If prices rise above it, the generator refunds the difference. In March, the renewable energy ministry approved a pilot through Solar Energy Corporation of India. It covers 500MW supplying 1,500MWh daily during non-solar hours.
The ministry is also promoting round-the-clock, firm and dispatchable, and hybrid renewable projects with storage. India targets 500GW of non-fossil capacity by 2030, against 308.02GW installed by 30 September. Developers increasingly see storage-backed assets replacing plain solar that floods exchanges at midday. India’s green energy ambition is now facing a test of delivery, not installation. Without faster transmission and storage, the bottleneck could derail that momentum.
