India tilts toward hybrid, storage power projects as solar prices remain low: Report

NEW DELHI: India's power sector tendering pipeline is now shifting towards hybrid and storage-based projects, reflecting a growing focus on improving energy reliability and supporting renewable energy integration, according to a report by Nuvama Research.

The report also noted that the country currently has an adequate solar power supply, with solar-hour electricity prices remaining low at Rs 4.3 per kWh in January 2026.

During solar hours, power supply outpaced demand, resulting in virtually no deficit, indicating sufficient availability of solar energy and stable daytime supply conditions.

It stated "Solarhour prices stayed low at INR4.3/kWh in Jan-26. Tendering pipeline is now tilting towards hybrid and storage".

While solar-hour supply remained strong, non-solar-hour supply stayed largely flat, reflecting balanced but steady power availability during non-solar periods.

Amid these developments, India's power demand increased by 4.8 per cent year-on-year (YoY) on aggregate in January 2026, despite similar lower temperatures compared with the same period last year.

The report stated, "Demand pickup drives optimism...India's power demand increased 4.8% YoY," highlighting continued strength in electricity consumption.

Peak power demand also increased during the month, rising by around 3 per cent YoY to approximately 245GW in January 2026, compared with around 237GW in January 2025. This reflects higher electricity usage and growing energy requirements across sectors.

The report further noted that thermal power plant utilisation remained stable. The all-India thermal plant load factor (PLF) stood at 67.7 per cent in January 2026, compared with 68.8 per cent in January 2025, indicating consistent use of thermal generation capacity.

Electricity trading activity also witnessed significant growth. The report stated that electricity volumes on the Indian Energy Exchange (IEX) rose by around 19.6 per cent YoY in January 2026, supported by a surge of 52.8 per cent YoY in the Real-Time Market (RTM). However, total volume growth was limited to 4.9 per cent YoY due to a 13 per cent decline in Renewable Energy Certificate (REC) volumes.

The report highlighted that the shift towards hybrid and storage-based projects is aimed at improving grid stability and ensuring a reliable power supply as renewable energy capacity increases.