Is India set for a clean power revolution amid a sharp drop in solar-plus-storage prices?

In a landmark shift for India’s clean energy transition, solar-plus-storage (S+S) projects are now capable of delivering 24/7 electricity at record-low costs—posing a formidable economic challenge to new coal-fired power.

According to a new report from the India Energy and Climate Center (IECC) at UC Berkeley, recent auction results show that the ‘flat block’ power problem—power availability continuously through the day and night—can now be supplied for less than ₹6 per kilowatt-hour (kWh).

Over the past few years, the cost of solar photovoltaic (PV) modules and lithium-ion batteries has plummeted. Solar module prices have dropped below ₹9/W ($0.10/W), while battery pack costs are now as low as $60/kWh for Indian developers—levels comparable to those in China. Coupled with improved performance, including battery life cycles exceeding 10,000 uses, these reductions have sharply lowered the Levelised Cost of Storage (LCOS).

Recent auctions reflect this trend vividly. In April 2025, a standalone battery energy storage system (BESS) was awarded at ₹2.8 lakh/MW/month (about $3,256) without subsidies.

Meanwhile, solar-plus-storage bids with 2–4 hours of storage duration fetched between ₹3.1 and ₹3.5/kWh (about $0.03). These figures represent a 50–60 per cent drop from just 18 months ago.

When reverse-engineered, the winning bids imply a flat block S+S power cost of ₹4.0–₹4.3/kWh (nearly $0.04) (assuming 60 per cent of daily solar energy is stored), with some configurations reaching up to ₹4.6/kWh ($0.05).

These prices are well below industrial electricity tariffs in most Indian states, which average around ₹7.9/kWh ($0.09) and are projected to rise with inflation.

Implications for industry and coal

IECC’s modelling suggests that solar-plus-storage can deliver reliable, 95 per cent availability clean electricity at ₹4.5/kWh ($0.052). Even with 100 per cent uptime through grid or diesel backup, prices remain under ₹6.2/kWh ($0.072)—undercutting coal-based power, which typically sees higher variability and costs.

Notably, unlike coal or grid tariffs, solar-plus-storage prices are fixed for 25 years and unaffected by inflation. Even after accounting for transmission tariffs, the total cost of solar-plus-storage remains well below prevailing industrial rates in many states.

This makes S+S particularly attractive for commercial and industrial consumers such as data centres and manufacturing facilities that demand round-the-clock power.

The IECC report, however, cautioned that region-specific planning will be needed to deal with transmission constraints and solar variability. But the economics are already compelling.

The findings also raise serious questions about the viability of investing in new thermal power plants. With S+S systems offering scalable, modular solutions and backed by falling capital costs, India’s clean power trajectory appears not only environmentally urgent but also economically inevitable.

IECC’s report concludes that India is replicating its global leadership in low-cost solar in the battery storage space as well, paving the way for a sustainable and resilient power future.