Even as India’s electricity demand hit record highs in April, power prices crashed to near-zero during peak solar hours during the month—a paradox driven by too much renewable energy chasing too little flexible demand.
For the second time in two years, rates on the Real Time Market (RTM) of the Indian Energy Exchange (IEX) dropped to near-zero— ₹0.0003 per unit on the afternoon of 5 April—as excess solar power flooded the market even as demand dipped due to rains and thunderstorms in Delhi and other parts of northern India. The first such instance was on 25 May last year.
Prices have since remained volatile, falling to as low as 40 paise per unit on 12 April even as they recently hit the ₹10 per unit cap amid a heatwave-driven surge in demand. Experts say such price swings reflect repeated bouts of oversupply on exchanges, even during periods of record consumption.
While weather-related demand fluctuations have contributed, industry stakeholders and analysts say the core issue lies in a structural mismatch: surging daytime renewable generation combined with limited storage and grid flexibility is pushing excess power onto exchanges, dragging prices down.
The trend is significant because power traded on India’s power exchanges accounts for about 12-13% of total supply, with the rest coming from long-term power purchase agreements (PPAs) between power producers and distribution companies (discoms).
A state discom official, speaking on condition of anonymity, said that even during peak solar hours and record demand, supply remains adequate due to the PPAs with both solar and thermal generators. As a result, discoms have little need to purchase additional power from exchanges during the day.
“However, exchanges witness higher demand during the evening peak, when solar supplies are not there,” the official added.
Renewable power companies say the issue is not weak demand for green energy, but a saturation in the system’s ability to absorb variable, or ‘infirm’ renewable power such as solar and wind.
Pointing out that discoms have a mandate to supply reliable power 24/7, Sanjeev Aggarwal, founder and chairman of renewable energy company Hexa Climate Solutions, said, “Plain-vanilla solar creates a massive surge of generation during a few afternoon hours, forcing discoms into a difficult balancing act where they over-procure during the day and scramble for expensive thermal power during the evening peak.”
He said the market is aggressively pivoting toward firm and dispatchable renewable energy and round-the-clock contracts, and that there is an urgent need to shift excess renewable energy to the evening peak through storage capacities.
Akshay Hiranandani, chief executive officer (CEO) of renewable energy company Serentica Renewables, said while India has achieved the 50% non-fossil capacity milestone five years ahead of schedule, installed capacity alone does not guarantee energy transition.
“With 5-6GW (gigawatts) of green energy being curtailed and the rest frequently receiving near-zero prices in certain slots and around ₹10 in others on the exchange, the urgent priority now is scaled-up battery storage to shift supply to higher-value periods, market reform, stronger RPO (renewable purchase obligation) enforcement, and a green real-time market that prices renewable power fairly,” he added.
Notably, green power generation has been curtailed in Rajasthan over the past year, the second largest renewable power generating state in the country. According to a recent report by Mercom India, a clean energy communications and consulting firm, about 11.5GW of renewable energy has been curtailed in Rajasthan since January 2026.
Currently, India has a battery storage capacity of 1,082 megawatt hour, and plans to place 236.22 gigawatt hours of battery storage capacity till FY32.
Queries emailed to the ministry of new and renewable energy remained unanswered till press time.
System strain beneath the surface
Analysts highlight challenges for traditional power plants from solar power surges.
Duttatreya Das, energy analyst for Asia at Ember, a global think tank focused on energy transition, said that during periods of high solar generation, coal plants are pushed down to their minimum technical limits (MTL).
“Sometimes, plants that are scheduled below their MTL, or older units that struggle to operate at such low levels, end up over-injecting to stay online, so they can ramp up again during the night,” Das said. “A combination of excess solar generation and this additional coal supply flows into exchanges, driving prices down to near zero.”
Alekhya Datta, director, electricity and renewables division, The Energy and Resources Institute (Teri), noted that high solar generation leading to zero pricing in the exchanges is a sign of oversupply rather than low demand, as discoms are restricted in terms of their capability to consume additional generation due to procurement issues.
“Although this trend suggests the presence of problems regarding the future growth in demand, it does not represent such poor prospects for the green market,” Datta said. “Indeed, the problem is caused by the mismatch, since RE penetration rates continue to rise. Battery storage—both grid scale and distributed—is critical to shift excess daytime generation to peak periods.”
The bottlenecks in integrating renewable power with the country’s electricity grid come in the backdrop of India’s aim to achieve 500GW of non-fossil capacity by 2030.
In 2023, the government set a target to auction 50GW of renewable power annually. As of 31 March, India’s total renewable energy capacity stood at 274.68GW, with an addition of 51GW in FY26.
However, even as the government steps up efforts to increase renewable capacity, about 43GW of solar power capacity has yet to find buyers.