India’s Renewable Energy Breakthrough: Coal-Like Reliability at a Lower, Fixed Price

ndia’s Renewable Energy Breakthrough: Coal-Like Reliability at a Lower, Fixed Price

BERKELEY, Calif., August 19, 2026: A landmark 1,000 MW round-the-clock renewable energy auction by the Solar Energy Corporation of India (SECI) has discovered a price of ₹5.25 per kilowatt-hour, fixed in nominal terms for 25 years. For decades, utilities have relied primarily on coal and other conventional generation for firm, reliable power.

SECI’s auction shows that there is now another option. Renewable energy paired with storage can provide reliable, baseload-like power—closely matching the way India’s coal fleet operates today—at a price below new coal power plants and without exposure to future fuel-price escalation. A new study from the India Energy & Climate Center (IECC) at the University of California, Berkeley, titled “India’s Renewable Energy Breakthrough: Coal-Like Reliability at a Lower, Fixed Price”, explains how this is possible.

The auction was designed to procure electricity most heavily through the evening, night and morning, while backing down during solar-rich midday hours.

Generators must supply at least 90% of contracted capacity during six peak hours selected by the buyer, at least 70% during the remaining non-solar hours, and between 50% and 60% during solar hours. Compliance is assessed in every 15-minute block, with shortfalls penalized at 1.5 times the contract price. 

The study tested whether solar and battery storage could economically deliver this profile using ten years of hourly weather data across ten Indian states.

It finds that, for every 1,000 MW contracted, a least-cost design at high-quality solar sites such as Rajasthan uses about 3 GW of solar and 12 GWh of battery storage. In other states, differences in solar resource and monsoon conditions can require roughly 15–20% more solar capacity, while the battery requirement remains around 12 GWh.

“A key reason is India’s relatively stable year-round solar resource, which is especially well suited to batteries,” said Umed Paliwal, Director, Modeling & Analytics at IECC and lead author of the study.

“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.”

The auction attracted bids from sixteen companies, with seven different developers ultimately securing capacity and every winning tariff falling within a narrow one-paisa range of ₹5.25–₹5.26 per unit.

“This price is consistent with the dramatic reductions in solar and battery costs we have seen in India,” said Nikit Abhyankar, Co-Faculty Director of IECC and a co-author. “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.”

The study concludes that these auction results could fundamentally change how Indian utilities plan to meet rapidly growing electricity demand. The opportunity extends beyond utilities. At ₹5.25/kWh, firm clean power becomes increasingly attractive for energy-intensive and round-the-clock industries including data centres, aluminium, steel, and other manufacturing.

“If India scales this model, consumers and industry could gain access to firm, clean electricity at a competitive price locked in for 25 years,” said Amol Phadke, Faculty Director of IECC and a co-author.

“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.”

University of California, Berkeley

About IECC
The India Energy & Climate Center (IECC) at UC Berkeley’s Goldman School of Public Policy leverages clean energy technology and policy expertise at the world’s top public university, Silicon Valley, and the state of California to catalyze the rapid transformation of energy systems that can deliver significant environmental, economic, and energy security benefits.

IECC works collaboratively with Indian policymakers and business leaders to design an innovation and deployment ecosystem through tech-informed policy design, capacity building, a leadership dialogue platform and south-to-south collaboration.