Solar plus 8-hour battery storage could deliver electricity at nearly half the projected cost of new coal power in Rajasthan, says a Climate Risk Horizons report
It estimates annual savings of INR 5,500 crore and up to INR 57,000 crore over 10 years by avoiding new coal additions
Rajasthan continues to face high renewable energy curtailment despite leading India in installed solar capacity
India’s ‘Sunrise State’ Rajasthan could save around INR 5,500 crore annually and up to INR 57,000 crore over a decade by avoiding new coal-based power generation, instead expanding solar power with battery energy storage systems (BESS), according to a new report by Bengaluru-based think tank Climate Risk Horizons.
Rajasthan can meet its power demand growth, as projected by the Central Electricity Authority (CEA), by replacing 3.2 GW of coal capacity with about 7.1 GW of solar PV, along with 2.1 GW of 8-hour BESS. Existing thermal power plants can help meet the remaining 6 hours of demand operating at minimum technical load, ensuring reliability, estimates the report.
CEA’s estimates in its Resource Adequacy Plan (RAP) indicate that Rajasthan has 2.535 GW of coal capacity already under construction or planned for commissioning by 2029-2030. It expects the state to require an additional 1.90 GW of coal over the coming decade alongside 16.8 GW of additional renewable energy, supported by 13.2 GW of 4-hour and 6-hour BESS.
The report warns that adding more coal power capacity could make the grid less flexible, making it harder to integrate renewable energy. It says this could increase costs, raise the risk of renewable energy curtailment, and lock the state into expensive and ‘inflationary’ coal-based electricity. It would keep consumers exposed to high electricity tariffs, lead to higher power tariffs for consumers, and reduce access to low-cost renewable energy, according to the report.
There are economic advantages with solar and storage replacing new coal capacity, the report writers point out. While estimated tariffs for new coal generation could reach INR 10.27 per kWh by 2031, solar with 8-hour BESS could deliver electricity at roughly half the cost of new coal-based power at INR 5.48 to INR 5.87 per kWh.
Harshit Sharma, the lead author of the report titled Sunrise State, said solar PV paired with 8-hour battery storage offers a lower-cost and cleaner alternative to new coal capacity. Additional capital investment for solar and storage could be recovered within 1.5 to 2 years due to lower electricity costs.
Rajasthan currently leads India in installed solar capacity with over 41 GW installed as of March 31, 2026, but the report said the state has used only around 5% of its renewable energy potential, which the National Institute of Solar Energy (NISE) pegs at 828.78 GW.
While renewables account for nearly 49% of electricity generation in the state (between April 2025 and January 2026), less than 24% of Rajasthan’s projected electricity demand for the current financial year is expected to be met through renewable sources. In 2025, RUVNL invited consultants to prepare feasibility and DPRs for 31.6 GW of solar parks in Rajasthan (see Rajasthan’s RVUNL Seeks Consultancy Bids For 31.6 GW Solar PV).
The report also highlighted high renewable energy curtailment in the state, which on some days reached over 50% in 2025, with as much as 4 GW of commissioned renewable energy capacity reportedly shut down during peak solar hours due to grid and system limitations. “More than 4 GW of commissioned capacity has faced near-total shutdown during peak solar hours, with curtailment reaching close to 100% between 11 am and 2 pm and injection restricted to staggered non-peak solar periods,” reads the report.
Co-Author of the report, Ashish Fernandes, said solar PV with 8-hour BESS could improve grid flexibility, reduce renewable curtailment, and support India’s energy security and net-zero goals.
The findings come as rising electricity demand driven by extreme heat and energy market disruptions linked to the Iran conflict has reportedly contributed to increased coal use in recent months. Authors recommend faster deployment of longer-duration battery storage, use of viability gap funding (VGF) to lower project costs, and better utilization of existing thermal plants rather than building new coal projects.
The complete report is available for free download on the Climate Risk Horizons website.