India Can Halve Power Costs by 2050 with Solar-Led System: Report

India has the potential to reduce its electricity costs by nearly 50 percent by 2050 by transitioning to a solar-dominant energy system supported by battery storage and demand-side flexibility, according to a new report by the international think tank, Energy Transitions Commission (ETC). The commission works globally to accelerate the transition to a net-zero emissions future.

The report estimates that such a system could deliver power at a cost of USD 27 per MWh, significantly lower than the USD 55 per MWh average wholesale price of fossil fuel-based electricity recorded between 2019 and 2030.

Of the total projected cost, USD 12 per MWh would go toward power generation, primarily from solar photovoltaics, while the remaining USD 15 would cover the cost of balancing technologies. These technologies are essential for maintaining grid stability and ensuring that supply and demand match at all times, even when solar generation fluctuates. Balancing strategies include short-term storage, dispatchable power generation, regional grid interconnections, and shifting electricity demand away from peak hours.

The report highlights several pathways for achieving this balance. Short-duration needs, defined as up to eight hours, can be met using lithium-ion or sodium-ion batteries, or through demand-side flexibility in both residential and industrial sectors. These solutions are expected to cost between USD 0 and USD 150 per MWh in 2035, declining further to USD 0–75 by 2050 due to falling battery prices and improvements in technology.

For medium- to long-duration balancing, covering periods of 8 to 50 hours, a wider array of technologies will be required. These include advanced battery solutions, compressed air energy storage (A-CAES), pumped hydro, thermal storage, and long-distance transmission lines to move power across regions. Costs for these technologies could range from USD 15 to $225 per MWh by 2035, with modest reductions anticipated by mid-century.

Ultra-long duration balancing, which deals with seasonal or multi-week mismatches between supply and demand, is projected to be the most expensive. Technologies in this category include natural gas plants with carbon capture and storage, which may be necessary during prolonged low renewable generation periods in colder or wind-reliant regions. The estimated cost for such solutions ranges between $200 and $400 per MWh. However, the report notes that India may not require significant investment in these long-duration solutions due to its consistent solar availability.

The ETC report also contextualizes India’s potential within a broader global trend. Other tropical countries, such as Mexico and several in Africa, could achieve electricity costs of USD 30–40 per MWh by 2050 with similar solar-led strategies. China is also expected to reach comparable costs due to its large-scale industrial capacity and expansive grid network that spans various climate zones.

Battery storage costs have already seen a dramatic decline over the past three years and are projected to fall further. Moreover, some forms of demand-side flexibility come at virtually no cost, such as adjusting industrial operations or incentivising consumers to shift usage, while others may require new investments, such as in vehicle-to-grid technology.

Despite the promising cost reductions, the report emphasises that substantial investments in electricity grid infrastructure will be necessary. With rapidly growing electricity demand and increasing shares of solar and wind generation, robust grid systems will be vital to transmit and manage renewable energy effectively. Technologies like pumped hydro storage, which leverages India’s topography, could offer cost-effective solutions for energy storage and balancing.

Adair Turner, Chair of the Energy Transitions Commission, stated that while other technologies like nuclear and geothermal may contribute to zero-carbon power systems, wind and solar are likely to provide over 70 percent of electricity in most countries. In sunbelt nations like India, the plummeting costs of solar panels and batteries are making renewable electricity not only sustainable but also more affordable than fossil fuels.

In conclusion, the report presents a strong case for India's transition to a solar-centric power system, backed by smart storage and flexible demand. With the right investments and policy support, India could achieve a cheaper, cleaner, and more resilient electricity system well before mid-century.