Solar boom: Cheap at noon, costly after sunset

NEW DELHI: India’s record expansion of solar power is creating a curious situation for the grid. The expansion is delivering cheap electricity during the day, but the situation reverses at night.

A working paper released by the Economic Advisory Council to the Prime Minister (EAC-PM), authored by its member Sanjeev Sanyal and joint director Satvik Dev, shows that rapid solar deployment, without matching investments in energy storage and demand management, is making the national grid increasingly expensive.

Titled “The Duck and The Camel: Tracing the Net Load on the Indian Power Grid”, the paper highlights India’s shifting power architecture and notes that while solar successfully displaces fossil-fuel generation during daylight hours, it forces conventional power plants to ramp their output up and down much more aggressively to meet the evening demand.

It also causes price fluctuation in the market. During May 2026, electricity traded on the day-ahead market at only Rs 1.11 per unit around midday, but jumped to Rs 9.71 per unit at night, frequently hitting the market ceiling of Rs 10 per unit.

The scale of this challenge was visible on May 21, when India recorded its highest-ever electricity demand met of 270.8 gigawatts. Around 11:15 am, peak solar production absorbed a major share of the load, causing the net load—total demand minus solar generation—to fall to 169.2 gigawatts.