A solar solution for India’s energy squeeze

Expanding solar capacity, storage, and adoption will be critical for reducing oil dependence and achieving energy sovereignty

When missiles fill the skies over West Asia, the tremors reach every household’s electricity and petrol bills. The conflict has exposed the vulnerability of India, the world’s third-largest consumer of crude oil, which imports nearly 89% of its requirement – roughly 1.75 billion barrels a year, or about 4.8 million barrels a day. Over 60% of that flows through the geopolitically sensitive Strait of Hormuz.

In 2024-25, India’s crude oil import bill was $137 billion. If prices stay at the March average of $113.57, this would balloon to nearly $200 billion. Every ten-dollar rise in the price of a barrel of crude adds $14 to $16 billion to India’s import bill. That is money drained from our precious foreign exchange reserves. That refined oil goes into trucks that move goods, tractors that farm fields, and fishing boats that feed coastal communities. It also powers diesel generators that keep telecom towers humming across rural India. There is a way to reduce this vulnerability. We are a nation bathed in light!

India’s geography gifts it with a blazing sun for more than 300 days a year. Unfortunately, sometimes, summer heat can also be a curse. We just witnessed a scorching April week. Nineteen of the twenty hottest cities in the world were in India. But what is a climate burden is simultaneously an energy opportunity of historic proportions.

India leads the International Solar Alliance, a coalition of over 120 sunshine-rich nations. In 2025, India added 38 gigawatts of solar capacity, surpassing the United States, which added 35 GW. Total installed solar capacity now stands at over 150 GW, and annual solar generation has rocketed from 3.4 terawatt-hours in 2013-14 to 144 TWh in 2024-25.

As April’s brutal heatwave pushed temperatures into the mid-forties and air conditioners across north India ran at full blast, the electricity grid faced its highest ever demand: 256 GW. Solar power alone was generating 81 GW on that critical day. This accounted for one-third of the total national generation. The grid did not collapse. It passed the stress test.

Solar’s potential is not just as clean energy, but also as securing our foreign exchange. Even a 10% reduction in oil import dependence would save between $13 and $20 billion annually, depending on oil prices. A displacement of 100 million barrels through solar-powered electricity substituting diesel gensets, electric pumps replacing diesel pumps, and electric vehicles reducing petrol and diesel demand, would still save $7.5 to $11 billion a year in foreign exchange.

There is also an intriguing possibility of India becoming an energy exporter. India’s refining capacity of 258 million metric tonnes already exceeds its domestic consumption of 239 MMT. In 2025, India exported 64.7 MMT of refined petroleum products – petrol, diesel, and aviation fuel – worth over $52 billion, a record high. Its refining capacity is set to expand to 309 MMT by 2028. If solar and electrification progressively reduce domestic fuel consumption, more of what India refines goes abroad, earning precious dollars. India would be importing crude, refining it far more efficiently, and exporting value-added fuel – functioning as a regional energy hub.

The trajectory, if pursued with determination, could see India shifting from an energy importer to a net energy value exporter. This is in the realm of the thinkable.

Challenges not insurmountable

There are hurdles in the solar journey. Panels need large tracts of land. This is a genuine constraint in a country where farmland is scarce and contested. The answer lies in deploying solar panels on fallow wasteland, rooftops, highway corridors, and canal banks. India already has programmes for all of these. Solar panels also need water to wash off the thick dust that settles on them, especially in Rajasthan and Gujarat, where solar potential is greatest, but water is scarce. Waterless robotic panel cleaners are an emerging solution. India should produce these at scale domestically.

Most critically, without storage, solar has a structural limitation. India urgently needs a massive deployment of storage systems. In 2025, India curtailed 2.3 TWh of clean solar power, simply because the grid could not absorb it. That is both an engineering failure and an economic one.

Then, there is the China problem. India imports most of its solar panels and components from China, which deepens trade asymmetry. However, domestic solar module manufacturing capacity has grown to 172 GW. The government has set a target of domestically produced solar cells and wafers by 2028. An India that makes its own solar equipment is truly energy sovereign.

Here are five action points. One: treat solar energy as part of the national security infrastructure. Funding should be at least doubled. Two: invest urgently and massively in battery storage. Or else, every evening, the grid falls back on coal and diesel. Three: upgrade the national transmission grid. Solar-rich states like Rajasthan and Gujarat need to be able to evacuate to demand centres in Maharashtra and Tamil Nadu. Four: accelerate EV adoption since transport is the single-largest consumer of petroleum. Five: scale rooftop solar energy through PM Surya Ghar and allied schemes.

India’s peak power demand is projected to rise further to 271 GW, driven partly by rising incomes and the spread of air conditioning. The opportunity and the urgency are both enormous.

The West Asia crisis offers us a window. In a world where oil routes can be disrupted overnight by wars India did not start, energy independence becomes a sovereign necessity. Every GW of solar power installed is one step away from the Strait of Hormuz. Every EV on the road is a barrel of oil India does not have to import. Every rooftop panel is a small act of national self-reliance.

The sun rises over India every morning without negotiation, without geopolitics, and without a price tag. The question is how India can harvest it at the scale and speed the moment demands.

(The writer is an economist; Syndicate: The Billion Press)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.