India projected to accelerate solar power generation as storage costs fall

India’s transition towards a clean energy-based digital economy may have received a boost from a new study showing that the costs of solar power and its storage are now lower than coal-generated electricity used by businesses in the country.

Solar and its battery storage costs have fallen to 6 Indian rupees (7 US cents) per kilowatt hour and are likely to remain stable for the next 25 years, according to a report by the India Energy and Climate Centre of the University of California, Berkeley released on May 28.

In comparison, India’s industrial tariffs for electricity, which is mostly powered by coal, have climbed steadily to an average of 8 rupees per kilowatt hour this year.

Nikit Abhyankar, an author of the study and a faculty member at UC Berkeley, told This Week in Asia: “Solar plus storage in India is now cheaper than industrial electricity tariffs in most states, and these prices would be locked in for decades.”

Emilia Chojkiewicz, the report’s lead author, said energy-intensive data centres supporting high-end computing, such as artificial intelligence, required clean power to minimise environmental impact. Insulating these facilities from future price shocks could offer India a strategic advantage, she added.

Battery storage costs had halved in the past 18 months, allowing solar energy to supply continuous electricity at rates lower than coal-based power in India, the report said.