Desert Sun Over Imported Gas: Unlocking Rajasthan and Gujarat’s Solar Potential to Reduce LNG Imports
India has long depended on imported liquefied natural gas (LNG) to meet part of its electricity demand, even though gas-based power contributes only a small share of the overall mix. This dependence comes at a steep cost, both financially and strategically. In 2024, India imported nearly 37 billion cubic meters (bcm) of LNG, worth around $15–20 billion, with about 3 bcm allocated to power generation. Yet, all of this translated into only 31.4 terawatt-hours (TWh) of electricity — less than 2% of India’s total generation. The imbalance between the money spent and the electricity produced highlights the need for alternatives.
Gas-fired electricity is not just small in contribution, but also highly volatile in cost. LNG prices in global markets have swung from $9 to $40 per MMBtu in the last five years, exposing India’s power sector to severe risk. At average prices of $11 per MMBtu, the 3 bcm of LNG used for power costs India between $1.0 and $1.6 billion each year. In years of price spikes, this burden crosses $2.5 billion. The question, then, is whether these billions could be more effectively deployed elsewhere.
Solar energy provides a clear answer. At present, gas-based electricity costs ₹5–7 per kWh, while solar tariffs in India average ₹2.5–3.0 per kWh, among the cheapest in the world. If the $1.0–1.6 billion currently spent on LNG were instead invested in solar power projects, India could build between 2 and 3.8 gigawatts (GW) of capacity every year. That translates to an additional 5–6 TWh of solar electricity annually. Though this figure is lower than the 31.4 TWh generated from gas, the key difference lies in permanence: LNG is burned once, but solar plants last 25 years, compounding output every year. Within five to six years, cumulative solar generation could match and surpass gas-based electricity.
One concern often raised is land availability. Solar does require space, about 4–5 acres per MW. To replace the 31.4 TWh of gas-based power, India would need around 20 GW of solar capacity, covering 325–400 km². This is just 0.01% of India’s land area, smaller than the city of Delhi. Rajasthan and Gujarat, with their vast deserts, hold more than enough barren land to host such projects. Rajasthan’s Bhadla Solar Park already operates at 2.25 GW, the largest in the world, while Gujarat’s Khavda Solar Project aims for 30 GW in a single zone. Floating solar on reservoirs and canal-top solar in Gujarat further ease the land challenge.
Redirecting LNG spending into domestic solar would not just deliver clean power but also create large economic multipliers. Every 1 MW of solar capacity generates 20–25 job-years in manufacturing, construction, and maintenance. At 2–3.8 GW added annually, India would create between 40,000 and 95,000 job-years each year. The economic benefits extend further. Renewable energy investments in India typically produce a 2.5–3x GDP multiplier. This means that $1.0–1.6 billion in redirected LNG spending could add $2.5–4.8 billion to GDP every year. Unlike LNG, which drains foreign exchange reserves, solar keeps capital circulating in the Indian economy and strengthens the domestic supply chain across modules, inverters, and storage.
Policy support is essential to make this transition possible. Investments must be coupled with transmission upgrades to move desert-generated power to demand centers and with storage systems to balance intermittency. Idle gas plants can be repurposed as peakers, providing backup only when needed. A framework that mandates reinvestment of LNG savings into solar and accelerates mega projects in Rajasthan and Gujarat would create a self-sustaining cycle of energy independence.
The strategic and environmental benefits are equally compelling. Phasing out gas power would reduce LNG imports by 3 bcm annually, saving over $1.0–1.6 billion in foreign exchange each year. It would also avoid nearly 20 million tonnes of CO₂ emissions annually. Most importantly, it would position Rajasthan and Gujarat as clean energy hubs, turning their deserts into engines of growth.
India’s annual LNG expenditure on gas power is, in effect, money burnt. Redirecting it into solar offers compounding returns: rising electricity output, new jobs, GDP growth, and strategic self-reliance. Within a single decade, India could replace all gas-fired electricity with solar. Beyond that, the country would have built a foundation for permanent energy sovereignty.
As Statscope India Research concludes, India’s path to energy sovereignty lies not in LNG tankers but in its deserts, powered by Indian-made solar panels.
Darshan Walawalkar, Partner at Statscope India Research, notes: “Every rupee saved on LNG is a rupee invested in India’s future — in jobs, technology, and energy security.”
Arun Durairajan, Partner at Statscope India Research, adds: “Our deserts can generate more than just heat; they can generate sovereignty. Solar is not just clean energy, it is strategic independence.”
