Renewable energy paired with battery storage can deliver round-the-clock, baseload-quality electricity to India at a price lower than that of new coal-fired power plants, according to a new study by the India Energy & Climate Center at the University of California, Berkeley. The findings, published on 20 August, draw on a landmark 1,000-megawatt auction conducted by the Solar Energy Corporation of India (SECI), which produced a tariff of ₹5.25 per kilowatt-hour, fixed in nominal terms for 25 years.

The Auction That Changed the Calculus

The SECI auction was specifically structured to procure the largest share of electricity during evening, night, and morning hours — the periods when solar generation is absent — while reducing supply requirements during solar-rich midday hours. Generators were required to deliver at least 90 per cent of contracted capacity during six peak hours selected by the purchaser and at least 70 per cent during remaining non-solar hours. During solar hours, the requirement ranged from 50 to 60 per cent. Compliance is assessed in every 15-minute block, with shortfalls attracting a penalty equivalent to 1.5 times the contract price.

The auction drew bids from 16 companies. Seven developers ultimately secured capacity, with all winning tariffs falling within a narrow band of ₹5.25 to ₹5.26 per unit — a clustering that researchers say signals a genuine market benchmark rather than an outlier bid.

What the Research Found

Researchers tested whether solar generation and battery storage could economically satisfy the auction's demanding reliability requirements, using 10 years of hourly weather data from 10 Indian states. They found that for every 1,000 MW contracted, a least-cost project at a high-quality solar site such as Rajasthan would need approximately 3 gigawatts of solar capacity and 12 gigawatt-hours of battery storage. States with weaker solar resources or more pronounced monsoon conditions could require roughly 15 to 20 per cent more solar capacity, though the battery-storage requirement would remain close to 12 gigawatt-hours.

Umed Paliwal, director of modelling and analytics at the centre and lead author of the study, attributed India's suitability to its geography. 'A key reason is India's relatively stable year-round solar resource, which is especially well suited to batteries,' he said. 'Its proximity to the equator means seasonal variation in solar output is significantly smaller than in higher-latitude countries, such as those in Europe, where generation can fall sharply in winter. India's main challenge is shifting abundant daytime solar into the evening and night, a task suited to mature, low-cost batteries,' Paliwal added.

Why the Tariff Number Matters

Nikit Abhyankar, co-faculty director of the centre and a study co-author, said the tariff reflects structural cost declines rather than aggressive bidding. 'This price is consistent with the dramatic reductions in solar and battery costs we have seen in India,' he said. 'And this is not one unusually aggressive bid: seven winners came in within one paisa. That gives us confidence that ₹5.25 is emerging as a market benchmark for firm renewable power, not an outlier. In fact, adjusting for inflation, the price will actually decline in real terms over the life of the contract,' Abhyankar said.

The study is titled 'India's Renewable Energy Breakthrough: Coal-Like Reliability at a Lower, Fixed Price' and was conducted by the India Energy & Climate Center, housed at UC Berkeley's Goldman School of Public Policy.

Impact on Utilities, Industry and Policy

Researchers argued that the auction could fundamentally alter how Indian electricity utilities plan for rapidly rising demand. Firm renewable power, they said, could become particularly attractive to data centres, as well as steel, aluminium, and other manufacturing industries that require uninterrupted electricity supply.

Amol Phadke, faculty director of the centre and a co-author, said the implications extend beyond India. 'If India scales this model, consumers and industry could gain access to firm, clean electricity at a competitive price locked in for 25 years,' he said. 'That combination of reliability, low cost and long-term price certainty could become an important competitive advantage for Indian manufacturing. India's experience also offers lessons for other countries still considering expensive new coal or gas plants,' Phadke added.

Notably, the findings arrive as India faces rapidly accelerating electricity demand driven by urbanisation, industrial expansion, and a growing digital economy. If the SECI model is replicated at scale, it could reduce India's exposure to coal price volatility while locking in long-term tariff stability — a combination that has historically been available only through coal or nuclear baseload.