By Ashok Kumar, Joint Secretary, Kamgar Ekta Committee
When the news came that power price dropped to near zero on India Energy Exchange (IEX) on 15 May 2026, many questions arose. Prices had dropped to near zero also on 5 April, 25 April and 1 May 2026. Why are people paying Rs 12-14 per unit? Zero price means there are no buyers for electricity generated in the country. How can that be when people are asking 24-hour regular power supply and are not getting it? Why will capitalists sell power at zero price? Despite the near-zero prices during the day, why did overall electricity prices on the IEX still increased during April 2026.
The primary reason for power price to fall to zero is the over-production of solar power during the sunshine hours of the day. India’s peak demand on 25 Apr was 256.1 GW with solar power supplying 21.5% of the afternoon power requirement. However, the contribution of solar power on that day over 24 hours was only 10.8% and just 0.1% of power requirement after sunset.
The country is witnessing a solar power glut where too much power is produced in the middle of the day, when it is least needed, causing the price to plummet.
The government gave a big push to green energy to reduce dependence on fossil fuels. Large incentives were given to capitalists to set up solar power generation capacity in the shortest possible time. State-owned power distribution companies, discoms, were forced to use at least 20-25% green power and enter into power purchase agreements with private solar power generators for the same.(Solar power use target for 2026-27 for discoms is over 27%) As a result, capitalist monopolies like Adani, Tata, Jindal and others have created huge solar power capacity during the last five years.
As of March 31, 2026, India’s total installed power generation capacity has grown approximately to 533 GW. The green energy capacity of 283.46 GW now accounts for more than half of the installed power capacity. Green energy is made up of power generated using hydel, wind, solar and nuclear energy.
Of the total green energy capacity, solar power capacity has the largest share with 150.26 GW capacity, 53% of total. In 2025-26 itself, capitalists added 44.61 GW solar power capacity, thereby increasing the capacity by nearly 30%. The states with the largest solar power capacity are Gujarat (71 GW), Rajasthan (60 GW) and Maharashtra (59 GW).
It is well known that solar power generation takes place only during the day time while power is required over 24-hours. Moreover, the power demand is the highest during evening hours. The demand pattern also varies from season to season. During summer, power requirement for cooling is the highest during the day time while during winter, power requirement peaks during night for heating. It is therefore essential that solar power storage capacity is simultaneously created with the generation capacity.
Capitalists however did not invest in creating storage capacity. As of early 2026, India’s cumulative battery energy storage capacity was only 1 GWh. As a result, in 2025, nearly 18% of monthly solar output had to be curtailed.
However, capitalists do not suffer by curtailment of solar power generation as discoms have committed to purchase all the power. As per the PPAs, discoms have to pay to private power monopolies even for power they have not used. This additional cost incurred by discoms is finally borne by people by way of higher power rate. People pay for maximising profit of capitalists through their electricity bill.
As solar power generation is concentrated in five states of Gujarat, Rajasthan, Maharashtra, Karnataka and Tamil Nadu, the generated power has to be transmitted all over the country from these states. However, power transmission capacity has not been created at the same rate as solar power generation capacity has been established. This is creating another set of problems.
The anarchy of production, a characteristic of capitalist system, can be seen so clearly in case of solar power. Production capacity is created without storage. Capacity to transport to the points of consumption is not created along with production capacity. Productive capacity is wasted while needs of people remain unfulfilled. People are made to pay for the anarchic capitalist system.
What is seen in case of solar power is witnessed in case of so many other commodities.
Capitalists create productive capacity in an area where the profit is the highest. The capacity creation is not done based on the needs of people. Often many capitalists rush at the same time to create capacity in areas they see high profit. Once more capacity is created than demand, the rate of profit in that area falls and the capacity creation slows down or totally stops. Over time demand grows to exceed the capacity leading to shortage. The rate of profit rises and once again capitalists rush in hordes to create capacity, leading to over-capacity. This cycle capacity keeps repeating under capitalism in case of most commodities.
In the case of most of the essential commodities, the capitalist system constrains the demand due to the limited purchasing power of working people. For maximising the profit, wages of working people are kept at the level just adequate for them to survive and return to work the next day. Wages are not enough to fulfil all their essential needs to lead a life that every human being deserves in the 21st century. Over-capacity of a commodity does not mean that all the needs of people for that commodity are getting fulfilled.
These problems cannot be solved under capitalism. We need a system where production will be carried out to fulfil needs of people and not for maximising private profit. Productive capacity will be planned along with its distribution. For that working people of India have to take up the challenge of becoming rulers of the country.