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India Has the Sun, But Where Is Its Concentrated Solar Industry? Photograph: (AI)
On the outskirts of Olpad, a coastal village about 30 km from Surat in Gujarat, the problem was not a shortage of water. The sea was right there. What villagers lacked was water they could drink.
The groundwater beneath the village was highly saline, with total dissolved solids (TDS) of around 800 mg/l, and families often depended on water tankers for their daily supply. For a group of four young engineers from Gujarat, this presented a question that was as much about energy as it was about water: could the sun be used to turn seawater into drinking water without depending on the grid?
Few years ago, chemical engineer Yash Tarwadi, then in his early twenties, and three fellow engineers began working on that idea. Their startup, Solnce Technologies, developed Sol-Evo, a solar-thermal desalination system that used concentrated sunlight to generate the heat required to desalinate water. In 2018, the team took the technology out of the laboratory and installed a standalone pilot unit at Olpad.
The concept was relatively simple, but its implications were significant. Instead of relying entirely on grid electricity to run a conventional reverse-osmosis system, the plant used concentrated solar energy as its primary source of heat. The system could process about 1,500 litres of seawater a day and produce potable water — an especially relevant proposition for coastal communities where electricity supply can be unreliable but sunlight is abundant. The usage of Concentrated Solar Project (CSP) for solving this critical problem, hints at the utility of this technology.
The numbers explain why. India’s installed solar capacity crossed 168 GW by August 2026, according to the Ministry of New and Renewable Energy. In the first five months of FY27 alone, the country added nearly 17.8 GW of solar capacity. But behind that extraordinary growth sits a technology that has never quite found its place in India’s energy transition: concentrated solar power, or CSP.
CSP uses mirrors to concentrate direct sunlight and convert it into heat. That heat can either be used directly in an industrial process or stored — often in molten salts or another thermal-storage medium — and subsequently used to generate steam and electricity after the sun has gone down.
That ability to store heat is the reason CSP once looked like the natural companion to solar PV. It is also the reason the technology has refused to disappear.  Yet more than a decade after India made CSP one of the centrepieces of its first National Solar Mission auctions, the technology remains a niche. The contrast is striking.
In August 2026, India had 168.04 GW of solar power capacity. CSP does not appear as a meaningful standalone category in the country’s current solar-capacity statistics. India’s first major CSP programme was supposed to look very different.
In Phase I of the National Solar Mission, more than 60 bids were received for CSP projects and seven projects totalling 470 MW were selected. But the programme did not produce anything close to the scale originally envisaged. A Climate Policy Initiative (CPI) study found that the government had tendered around 500 MW of CSP but that only about 10% of the targeted deployment had been installed at the time of its assessment.
The reasons were technical, financial and, ultimately, economic. But the story becomes more revealing when viewed through what happened both inside and outside India.
Perhaps the clearest warning about India’s solar-thermal journey does not come from an industry conference or a failed private project. It comes from Parliament. Few years back, the Public Accounts Committee presented its 61st Report on “Non-utilisation of Solar Thermal Power Plant”. The committee examined a 1 MW grid-interactive solar thermal power plant established at the National Institute of Solar Energy (NISE) in Gurugram.
The project, developed with IIT Bombay and other partners, had cost about ₹46.26 crore. It was not functioning. The PAC said the expenditure had become “infructuous” and asked MNRE to explore the possibility of reviving the plant at the earliest. The CAG had found that the failure to develop a dedicated workforce capable of operating the plant continuously had contributed to its non-utilisation.
That finding is important because it captures one of India’s recurring problems with emerging energy technologies. The country has often been good at announcing demonstration projects. It has been less successful at turning those demonstrations into functioning commercial ecosystems.
The parliamentary committee itself pointed out that three other similar solar-thermal projects — two in Rajasthan and one in Andhra Pradesh — were operating successfully, suggesting that the technology itself was not necessarily the problem. The question, therefore, was not whether concentrated solar could work. It was whether India could build the ecosystem around it. That question remains unanswered.
The first National Solar Mission experiment was ambitious. Seven projects, using different CSP technologies, were awarded a total of 470 MW through reverse auctions. The projects included parabolic trough and linear Fresnel systems, with individual project sizes ranging from 20 MW to 100 MW.
The problem was that the auction mechanism pushed developers towards very aggressive tariffs at a time when the technology was still unfamiliar in India. The Climate Policy Initiative later found that the average tariff produced through the auction was about 25% below the reference tariff for Phase I CSP. But only developers with strong financial backing, access to public debt and considerable risk appetite were able to make progress. The 100 MW Rajasthan Sun Technique project, for example, benefited from about $280 million in long-term foreign public debt and extensive technology guarantees.
In other words, India succeeded in discovering a low theoretical tariff. It did not succeed in creating a commercially repeatable CSP industry.
CSP is not PV. A photovoltaic project can be assembled from standardised modules, inverters, structures and cables, with a relatively straightforward construction cycle. A CSP plant is closer to a conventional power project.
It has a solar field, tracking systems, receivers, heat-transfer systems, steam generation, turbines and, increasingly, thermal storage. Every additional component adds engineering and financing risk. India was trying to learn all of that while simultaneously asking developers to bid aggressively.
The result was delays, financing problems, technology-procurement difficulties and, in several cases, projects that never materialised. A CEEW-NRDC study from the early years of the National Solar Mission had already identified many of these problems. It found that no CSP plant under the programme had been financed on a conventional non-recourse basis; developers struggled to find adequately trained technicians; reliable Direct Normal Irradiance data was inadequate; and heat-transfer-fluid availability was a bottleneck.
The report also warned about another contradiction that remains relevant today: the best CSP locations are often dry regions where water is scarce. Five of the seven National Solar Mission CSP projects were in Rajasthan, and the report noted that their dependence on the Indira Gandhi Canal created a risk to generation because of water-supply shortages.
While India was trying to solve these problems, another solar technology was undergoing a revolution. PV module prices fell. Manufacturing scaled. Utility-scale solar parks became easier to finance. Developers became comfortable with the technology. And tariffs fell to levels that made CSP look increasingly difficult to justify for ordinary daytime electricity.
This is the central economic problem for CSP in India. If the requirement is simply to generate electricity when the sun is shining, PV wins. The CSP argument begins only when the value of heat storage, dispatchability or high-temperature process heat is taken into account. That distinction has become even more important as battery storage has become cheaper.
TERI’s May 2026 consultation on CSP and thermal energy storage brought together government officials, utilities, developers, financial institutions and technology providers. One of the questions raised during the discussion was blunt: with BESS prices falling significantly, why would buyers choose CSP and thermal storage?
That is now the fundamental test for CSP.  But whether what it does is worth paying extra for.
If India wants to understand both the promise and the limits of CSP, it does not have to look far beyond the world’s best-known example. The Noor Ouarzazate complex in Morocco has become synonymous with large-scale concentrated solar.
The complex has around 580 MW of combined capacity, including 360 MW of parabolic-trough CSP, 150 MW of central-tower CSP and 70 MW of PV. Its CSP plants use thermal storage to extend generation beyond daylight hours. Noor was built around a very different institutional model from India’s early CSP programme.
Morocco treated solar thermal as strategic infrastructure. Development banks and international institutions provided large amounts of concessional finance, while the Moroccan solar agency MASEN played a central role in project development.
The World Bank and other institutions were not simply financing a power plant. They were helping build a national solar programme. The result was one of the world’s largest CSP installations. But Noor also provides a warning against romanticising the technology.
The 150 MW Noor III tower plant suffered a major molten-salt storage failure and remained offline for more than a year. It resumed operations in April 2025 after repairs. The plant uses more than 7,400 heliostats and stores heat at temperatures reaching around 565°C.
Reuters reported that the storage problem contributed to a roughly $47 million impact for ACWA Power and raised questions about the technology’s cost and reliability. Morocco’s own next-generation solar programme tells an even more interesting story.
Noor Midelt was initially conceived as a hybrid PV-CSP project. But disputes over the economics and reliability of CSP delayed the project, with Morocco’s energy ministry and grid operator pushing for alternatives involving PV and batteries. Reuters reported that the original $2 billion, 800 MW project had been stalled amid those technology disagreements.
By 2025, the next Noor Midelt projects had shifted towards PV plus battery storage rather than the original PV-CSP configuration. So even Morocco — perhaps the world’s most important CSP laboratory — is asking the same question India is asking. Where does CSP still make economic sense when PV and batteries keep getting cheaper?
This is where India’s less glamorous solar-thermal projects become much more interesting. Take Muni Seva Ashram in Goraj, Gujarat. The institution has been experimenting for years with concentrating solar systems to produce steam for applications including cooking, laundry and other institutional requirements.
This is a completely different proposition from a 100 MW power plant. The solar concentrator is not competing with PV for the lowest electricity tariff. It is replacing a conventional source of heat. That could mean LPG, diesel, electricity or another fuel. Suddenly the economics look different. The same logic appears in India’s solar-cooking experiments.
Janak Palta McGilligan’s work at the Barli Development Institute for Rural Women in Madhya Pradesh has involved training thousands of women in solar cooking and food processing, with hundreds of solar cookers deployed through the programme.
The Brahma Kumaris’ India One solar-thermal plant at Abu Road in Rajasthan provides perhaps the clearest Indian example of CSP being designed around a known energy requirement rather than around an abstract electricity tariff. The 1 MW solar-thermal plant uses hundreds of parabolic dishes and thermal storage to provide energy for the organisation’s large campus. The significance is not its size. It is the business model. The plant has a captive consumer.
There is no need to convince a DISCOM to buy expensive solar electricity simply because it is solar. The energy is produced where it is needed. That model is repeated, in different forms, across India’s solar-thermal installations. And it points towards what may ultimately be the technology’s strongest Indian market.
Maharashtra is beginning to create that market. The emergence of solar-steam tenders in Maharashtra is therefore worth watching. Public agencies have begun procuring Scheffler-based solar steam cooking systems for institutional facilities, including facilities of the State Reserve Police Force.
These are not giant CSP power plants. But they are arguably more important for the industry’s future. A tender creates a customer. A customer creates a performance requirement. A performance requirement creates an O&M market. A growing O&M market creates confidence among lenders and technology providers. And enough installations can eventually create a manufacturing ecosystem. That is precisely what India’s first CSP programme struggled to achieve.
The country’s largest power utility is also testing whether CSP can make sense in the emerging market for firm renewable electricity. NTPC has invited interest in a 50 MW CSP project coupled with thermal energy storage capable of providing eight hours of peak and non-solar-hour generation.
It has also examined a 100 MW renewable round-the-clock configuration combining wind and CSP, with at least 200 MWh of dedicated CSP thermal storage, and another 100 MW configuration using CSP, storage and other renewable sources including PV and wind. This is a fundamentally different proposition from the National Solar Mission auctions. The question is no longer:
“How cheaply can CSP generate solar electricity?” It is: “How much does the grid value renewable electricity that can be dispatched when required?” That is a question India will increasingly have to answer.
Electricity demand is rising rapidly. The IEA expects India’s electricity demand to grow at an average 6.4% a year through 2030, while the share of variable renewables is also expected to increase significantly. As solar and wind penetration rises, the value of flexibility will rise too. The challenge is that CSP is not competing for that market alone.
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