Time for India to go solar

The ongoing crisis in West Asia has exposed India’s vulnerability as the world’s third largest consumer of crude oil, importing nearly 89 per cent of its requirement i.e. around 1.75 billion barrels a year or 4.8 million barrels every day. Over 60 per cent 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 then the import bill would balloon to nearly $200 billion. Every $10 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.

There is, however, a way to reduce this vulnerability.

India is gifted with a geographical location that brings blazing sunshine for more than 300 days a year. Summer heat can also be a curse — especially for the most vulnerable. April saw India at the epicentre of a global heat surge, with AQI.in reporting that 19 of the 20 hottest locations in the world were located in India, as well as 95 of the 100 hot-test cities globally. But this 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 new solar capacity, surpassing the United States, which added 35 gigawatts. Total installed solar capacity now stands at over 150 gigawatts, and annual solar generation has rocketed from 3.4 terawatt-hours in 2013-14 to 144 terawatt-hours in 2024-25.

On 25 April, as the 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 gigawatts. Solar power alone was generating 81 giga-watts on that critical day. This was one-third of total national generation. The grid did not collapse. It passed the stress test.

Solar’s potential is not just about clean energy but also about securing our foreign exchange reserves.

Even a ten per cent reduction in oil import dependence would save between $13 to $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 an additional intriguing possibility: India could become an energy exporter.

India’s refining capacity of 258 million metric tonnes already exceeds its domestic consumption of 239 million metric tonnes. (This refined oil goes into trucks that move goods, tractors that farm fields, fishing boats that feed coastal communities. It also powers diesel generators that keep telecom towers humming across rural India.)

In 2025, India exported 64.7 million metric tonnes of refined petroleum products — petrol, diesel, aviation fuel — worth over $52 billion, a record high. Refining capacity is set to expand further, to 309 million metric tonnes by 2028.

If solar and electrification progressively reduce domestic fuel consumption, more and 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 an energy hub for the region.

The trajectory, if pursued with determination, could see India transition from being an energy importer to becoming a net energy value exporter. It is conceivable.

The hurdles on the solar journey are real, but not insurmountable. Solar 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. This is a problem, especially in Rajasthan and Gujarat where solar potential is greatest, but water scarce. Waterless robotic panel cleaners are an emerging solution. India should produce these at scale domestically.

Most critically, the sun sinks every evening, but demand does not. Without storage, solar power has a structural limitation. India urgently needs massive deployment of storage systems. In 2025, India curtailed 2.3 terawatt-hours 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 gigawatts. The government has set a target of domestically produced solar cells and wafers by 2028. An India that makes its own solar equipment would truly be energy sovereign.

Here are five action points:

1. Treat solar energy as national security infrastructure, equal in priority to defence. Funding should be at least doubled.

2. Invest urgently and massively in battery storage. Or every evening the grid will have to fall back on coal and diesel.

3. 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.

4. Accelerate electric vehicle adoption across two-wheelers, three-wheeler and buses since transport is the single largest consumer of petroleum.

5. Scale rooftop solar energy through PM Surya Ghar and allied schemes.

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

The current crisis in West Asia 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 gigawatt of solar power installed is one step away from the Strait of Hormuz. Every electric vehicle on the road is a barrel of oil India does not have to import. Every rooftop panel is a small act of genuine self-reliance.

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

Ajit Ranade is a noted economist. More of his writing may be found here