India’s solar power generation grew 39% year-on-year (YoY) in Q2 FY2026–27. However, grid and operational constraints, along with limited energy storage capacity, led to the curtailment of 1.46 billion units of solar electricity in July and August, despite high electricity demand, according to a report by the Center for Research on Energy and Clean Air (CREA). 

India’s peak electricity demand reached 270 GW on July 16, 2026, up 18% from 230 GW in the same quarter a year earlier. Daily peak demand occurred during solar-generation hours on 62 of the quarter’s 92 days. 

Despite record peak demand, India’s coal power plants operated at a 68% utilization rate in Q2 FY2026–27, according to CREA. 

However, although solar was the fastest-growing major source of electricity generation during the quarter, with output reaching a record 705 million units (MU) on September 30, 2026, it was curtailed. This renewable energy source accounted for 58% of the increase in renewable electricity generation during the quarter.   

Nevertheless, India’s solar capacity reached 168 GW as of August 2026, accounting for around 30% of the country’s total installed power capacity of 555 GW, next only to coal and lignite’s 231 GW. The latter accounted for 66% of the national generation mix even as plant-level stocks declined. 

During the reporting quarter, in the months of July and August, India curtailed 1,462 MU of solar and 373 MU of wind capacity, out of 1,835 MU of renewable energy capacity curtailed. 

In light of these findings, Manoj Kumar, India Analyst at CREA, argues that India must assess new thermal capacity against expected demand, renewable generation, and storage availability, as solar increasingly meets daytime electricity demand while storage helps meet evening and nighttime peaks. 

“This will help avoid building capacity that could remain underutilised as India’s power system evolves,” added Kumar. 

According to CREA’s report, titled Quarterly Energy Snapshot for India: Q2 2026–27, India had approximately 9.1 GWh of operational battery energy storage system (BESS) capacity as of the time of the report’s publication. Another 3 GWh is expected to be commissioned by December 2026. As of August 2026, storage projects totaling approximately 290 GWh had been tendered. This included 151 GWh of battery storage and 142 GWh of pumped hydro storage. 

Storage contributed up to 5.5 GW during nighttime peak demand, up from 4.1 GW in the first quarter of fiscal 2026-27. The gap between the storage project pipeline and operational capacity is quite visible, since storage met only about 1% to 2% of national electricity demand during these periods. 

In a recent report, Rubix Data Sciences said India will need up to INR 4.79 trillion in investment to meet its projected BESS requirement – 236.22 GWh by FY 2031-32 – as renewable capacity and peak power demand rise