Rajasthan could save nearly ₹57,000 crore over the next decade by prioritising solar power coupled with battery energy storage systems (BESS) instead of investing in new coal-fired power generation, according to a new report released by Bengaluru-based think tank Climate Risk Horizons. The study estimates annual savings of around ₹5,500 crore, highlighting the growing economic advantage of renewable energy-backed storage solutions.
Titled Sunrise State, the report notes that rising electricity demand driven by extreme weather conditions and global energy market uncertainties has temporarily increased coal consumption. However, escalating coal generation costs are making renewable alternatives increasingly attractive for utilities and consumers alike.
The analysis found that combining solar photovoltaic (PV) systems with 8-hour Battery Energy Storage Systems (BESS) can provide electricity at nearly half the cost of new coal-based generation. According to the report, coal power costs have increased significantly between 2020 and 2025, with both capital and operational expenses rising by more than 30 percent.
“With rising coal power costs, tariffs are projected at INR 10.27/kWh by 2031. This will lock the state into expensive and polluting power generation, expose consumers to high electricity tariffs and limit access to abundant, low-cost RE. We recommend pairing solar PV with 8-hour BESS as an alternative that can deliver up to 18 hours of renewable power at INR 5.48/kWh–INR 5.87/kWh, which is roughly half the cost of new coal-based power,” said Harshit Sharma, lead author of the report.
The report states that renewable energy combined with long-duration storage can meet up to 18 hours of daily electricity demand, while the remaining six hours can be served through Rajasthan’s existing thermal generation fleet. At the projected savings levels, the additional investment required for solar-plus-storage infrastructure could be recovered within 1.5 to 2 years.
Despite leading the country in installed solar capacity, Rajasthan has utilized only about 5 percent of its renewable energy potential, according to the report. While renewables contribute nearly 49 percent of electricity generated within the state, less than 24 percent of the state’s projected energy demand this financial year is expected to be met through renewable sources. The report also points to high renewable energy curtailment, which exceeded 50 percent on certain days in 2025, limiting the full utilisation of available solar resources.
As per the Central Electricity Authority’s (CEA) Resource Adequacy Plan, Rajasthan currently has 2,535 MW of coal capacity under construction or planned by 2029-30, with an additional requirement of 1,905 MW of coal-based generation projected over the next decade. At the same time, the plan envisages 16.8 GW of new renewable energy capacity supported by 13.2 GW of battery storage systems.
“This analysis demonstrates that pairing solar PV with 8-hour BESS offers a compelling alternative to new coal capacity. Beyond cost advantages, this approach enhances grid flexibility, reduces curtailment, and aligns with India’s energy security goals and Net Zero commitments. We recommend prioritising solar PV + BESS to meet all growth in power demand in the state, at a significant net benefit to consumers,” said Ashish Fernandes, co-author of the report.
The report further recommends accelerating deployment of 8-hour battery storage systems, expanding beyond the currently prevalent 4-hour configurations. Such systems would enable greater utilisation of daytime solar generation, extend renewable energy supply into evening hours, reduce dependence on thermal power for balancing requirements, and improve overall grid reliability. Additionally, the study suggests leveraging policy support mechanisms such as Viability Gap Funding (VGF) to improve the commercial viability of battery storage projects and attract further investments into the sector.
