India's solar boom eases daytime demand, but night shortages persist

India's grid is increasingly managing daytime demand through solar power, but evening shortages show why storage and flexibility are now critical

At first, India’s record electricity demand this summer appeared to signal a renewable energy success story. On April 25, when peak demand touched 256 Gw, renewables met nearly 30 per cent of the requirement, including solar at 22 per cent, according to Grid India data. But the strain emerged after sunset. At 10.39 pm, the grid recorded a power shortfall of 4.2 Gw.

 

Almost a month later, the pattern was repeated. On May 21, India’s electricity demand climbed further to a record 270.8 Gw. While daytime shortages remained negligible, the grid again reported a sharp rise in shortages during non-solar hours later in the night. At 10.45 pm, the shortage rose to 2.5 Gw.

   

The numbers point to a limitation in India’s energy transition story. The system is becoming increasingly capable of handling daytime demand with solar power, but it is struggling during evening peak hours, when solar generation collapses.

 

The challenge is no longer only about adding renewable capacity. It is about storing daytime solar power and making it available when consumers need it most.

 

Why solar power alone is not enough

 

Solar panels generate electricity only when sunlight is available, while household consumption typically rises after sunset. A rooftop solar home without a battery can use solar electricity during the day but still depend on the grid at night. Similarly, utility-scale solar plants without storage cannot independently meet evening peak demand.

 

The missing link is the ability to store excess daytime electricity and dispatch it later through batteries, pumped hydro systems or other storage technologies.

 

The mismatch is already visible in India’s electricity markets and grid operations. On May 3, electricity prices on India’s main power exchange fell to ₹1.85 a unit by 8 am and kept falling as solar plants offered nearly six times more power than the grid could absorb. By evening, prices climbed back to ₹4-5 a unit as demand rose after sunset.

 

“The bottleneck on the other side is coal,” said Binit Das from the Centre for Science and Environment. “India faces steep evening ramp requirements of about 60 GW, while national ramping needs reach up to 500 MW per minute on some days. Coal plants, physically constrained below 55 per cent load, simply cannot flex fast enough to follow this curve. Rising night-time temperatures are pushing cooling demand higher precisely when solar generation drops to zero.”

 

As solar capacity rises, grid operators are being forced to manage two opposing pressures: excess renewable generation during the day and supply stress in the evening.

 

Where the storage gap is coming from

 

India still lacks enough battery and pumped hydro storage capacity to shift large volumes of daytime renewable energy into evening hours. According to estimates by the Central Electricity Authority, India requires over 411.4 GWh of battery energy storage capacity by 2031-32 to integrate solar and wind capacity.

 

“Storage will become essential for balancing the grid, shifting excess daytime generation to peak consumption periods, and improving the reliability of renewable energy,” said Pratik Kamdar, co-founder and chief executive officer of Neuron Energy.

 

The scale of the storage challenge remains large. India has deployed only around 6 Gw of battery storage so far, even as renewable capacity continues to expand rapidly.

 

Vinay Rustagi, chief business officer at Premier Energies, said the grid could earlier absorb solar variability more easily when renewable penetration was lower. But rapid solar expansion has now created “an acute need for storage capacity to provide firm power to consumers.”

 

The shift is also reshaping investment priorities. “India’s renewable energy sector is clearly entering a second phase focused on storage, flexibility and grid integration, rather than just adding solar and wind capacity,” said Somesh Kumar, partner and leader, power and utilities at EY India.

 

What India needs to fix evening power stress

 

The priority now should be building a power system flexible enough to shift electricity across different hours of the day.

 

Storage deployment is a key part of that shift. While battery prices have fallen sharply over the past decade, industry executives say financing, manufacturing scale and policy execution remain bottlenecks.

 

“The next stage will depend on scaling execution, accelerating domestic manufacturing, and creating investment frameworks that support long-term deployment,” Neuron Energy’s Kamdar said.

 

Grid flexibility is another critical issue. India may need a mix of utility-scale batteries, pumped hydro and distributed storage systems as renewable penetration rises.

 

Das pointed to the need for faster rollout of smart meters and time-of-day tariffs, which can encourage consumers to shift some electricity consumption away from evening peak hours. “Without metering, time-sensitive pricing remains theoretical,” he said.

 

Policy and market reforms will also be needed to attract storage investment. EY India’s Kumar said storage projects still require clearer revenue visibility and stronger market mechanisms to scale up deployment. He pointed to time-of-day tariffs, capacity payments for firm power supply, ancillary services markets, viability gap funding and concessional financing as key enablers.

 

He added that regulatory recognition of storage as a distinct asset class and clearer procurement frameworks for utilities would become increasingly important as India moves towards firm and dispatchable renewable power.

 

The next phase of solar is about night

 

India’s solar story has entered its next phase. The first phase was about making solar cheap and scaling capacity. The next will be about making solar available when consumers need it most.

 

For households, the promise of solar will not be fully realised at noon, when generation is abundant, but after sunset, when the grid is under the most pressure.

 

“India has spent 15 years installing panels. The next 10 will be decided by what it builds around them. The grid doesn't need more solar. It needs more solar hours,” said Das.