On 25 April 2026, India’s peak electricity demand touched the highest level at 256.1 gigawatts (GW) due to intense summer heat. The peak occurred in the afternoon. Roughly one-third of this demand was met through renewable sources, while fossil fuels still accounted for 68.9%.
This peak, occurring during daylight hours, highlights an important opportunity for the power system, as it increasingly overlaps with hours of maximum solar generation. Further expansion of solar capacity, supported by stronger transmission infrastructure, storage, and grid flexibility, could help reduce dependence on fossil fuels during peak periods. This growing demand-supply coincidence positions solar to play a key role in meeting rising electricity needs more sustainably.
Solar energy is central to India’s renewable energy transition. The country is well positioned to scale solar deployment, given its geographic advantage in the tropical belt, which ensures abundant sunlight throughout most of the year. Over the past decade, solar deployment has accelerated significantly, with 143 GW of incremental solar capacity added, supported by sustained policy focus and sharp cost reductions.
The pace of growth has been impressive. In FY2026 alone, India added around 54GW of renewable energy capacity, with solar contributing 82% of this increase. Solar tariffs have fallen sharply from over USD0.14 per kilowatt-hour (kWh) (~INR12 per kWh) 16 years ago to record lows of around $0.032–0.033 per kWh (~Rs 2.7– Rs 2.76 per kWh) today, making solar increasingly cost-competitive within India’s energy mix.
While utility-scale solar has driven much of India’s recent capacity additions, decentralised and rooftop solar offers a key untapped opportunity to improve both utilisation and access to clean energy. Schemes such as PM Surya Ghar: Muft Bijli Yojana have accelerated residential rooftop adoption, with over 3.2 million households installing systems as of 16 March 2026. In FY2026 alone, about 9GW of rooftop solar capacity was added in India, bringing the cumulative rooftop capacity to 26GW.
Through schemes like PM-KUSUM, more than one million solar pumps (80% of the sanctioned pumps) have been installed, enabling farmers to reduce diesel use and electricity costs.
Despite rapid growth in recent years, India has only scratched the surface of its solar potential, highlighting the significant headroom for further expansion. As of March 2025, India’s solar potential stood at 3,343 GW, accounting for nearly 71% of the country’s total renewable energy potential. However, only 4.5% of this solar potential has been harnessed as of March 2026, leaving a vast untapped opportunity.
The transition is not without gaps. A key challenge is aligning electricity demand with solar generation. Solar power peaks during the day, while demand is often higher in the evening, creating a structural mismatch. Instruments such as solar-hour-aligned time-of-day (ToD) tariffs can address this by shifting consumption to daylight hours, improving grid utilisation, and reducing reliance on evening peak thermal power.
States are central to implementing and scaling such tariff structures. Several states, including Maharashtra, Gujarat, Bihar, Assam, and Rajasthan, among others, have already introduced solar-aligned ToD tariffs, reflecting growing state-level adoption. Complementary demand-side measures like smart metering, dynamic pricing, and industrial load shifting can further improve grid efficiency and solar utilisation.
Storage is also a key enabler, helping store excess daytime solar generation and supply it during evening peaks, thereby improving grid reliability. India currently has only about 6GW (mostly pumped hydro) of energy storage capacity, while estimates suggest nearly 61GW will be needed by 2030 to support a renewable-heavy grid.
Even with these challenges, the direction is clear. India has strong solar resources, rapidly falling costs, and growing adoption across sectors. The next step is to improve demand management and strengthen storage, modern grids, and stable policy support so solar can reliably meet India’s growing power needs, day and night.
