Kamal Ghorui
India’s latest gas shortages, triggered by the current Middle East conflict, highlight how vulnerable its industrial energy system remains. From textiles and food processing to chemicals and metals, manufacturing relies heavily on fossil fuels to generate heat, much of it supplied by imported oil and gas. When global disruptions tighten supplies, factories face soaring costs or shortages, as seen during the price spikes after the Ukraine war. The fallback is often coal, still the dominant fuel for industrial heat in India, but one that carries heavy costs through air pollution and health damage. For decades, industry has been caught between volatile energy imports and dirty domestic fuels.
India’s dramatic success in lowering solar and storage costs now offers a way out. Renewable electricity is inexpensive, stable in price, and increasingly accessible through open-access rules. Electric heat technologies powered by this low-cost solar energy can provide reliable industrial heat, often at lower cost than oil or gas and with far less pollution than coal.
Heat pumps multiply India’s solar advantage
Heat pumps are the most powerful tool in this new landscape. Instead of generating heat by burning fuel, they use electricity to move heat from one place to another, essentially air conditioners running in reverse. They can deliver two or three units of heat for every unit of electricity consumed, while fuel combustion wastes energy. In a country where solar power is routinely available near three rupees per kilowatt-hour, the delivered cost of heat from a heat pump can fall below one rupee per kilowatt-hour. No fossil fuel, imported or domestic, can match this cost.
Most low-temperature industrial processes below about 180°C can already switch to heat pumps available in India. This includes large parts of industries such as textiles, pharmaceuticals, food processing, dairy, and beverages, as well as many micro, small, and medium enterprises. For manufacturers that rely on imported fuels like furnace oil, diesel, LPG, or piped gas, heat pumps offer both price stability and significant savings.
Storing the sun: Thermal batteries for high-temperature manufacturing
Electric heat is no longer confined to low temperatures. Thermal batteries, which store heat directly inside solid materials like bricks or ceramic blocks, are commercially available today and can output heat at temperatures up to 500 degrees Celsius, while future models will be able to output heat at over 1,500 degrees Celsius. They can be charged during sunny hours and provide steady, high-temperature heat throughout the day and night, supporting manufacturing facilities that run continuously. These systems last for decades and use abundant, inexpensive materials, in contrast to electrochemical batteries, which require costly materials like lithium and cobalt.
This opens the door for clean heating in heavy industries that have long relied on gas or coal for high-temperature heat. Industries like glass, metals, ceramics, and chemicals can now operate furnaces and kilns using heat drawn from domestic renewable power.
For factories with available land, the combination of solar generation and thermal batteries offers true energy independence. They can generate power on-site, charge their batteries during low-cost hours, and reliably run high-temperature processes 24 hours a day, seven days a week. This is the beginning of a new model of clean and cost-effective domestic manufacturing.
Air pollution and energy security dividend
Coal- and furnace-oil-fired boilers near cities are major contributors to local air pollution, often operating without adequate emission controls and close to large populations. In cities such as Delhi, Mumbai, Pune, Ahmedabad, Surat, Chennai, Kanpur, and Ludhiana, they account for up to 30% of PM2.5, SO₂, and NOx, contributing to serious illnesses including lung cancer, strokes, and heart disease.
Electrifying industrial heat eliminates these emissions at the source. It also reduces reliance on imported oil and gas, delivering a twin benefit: cleaner air and lower energy imports.
How policy can accelerate clean industrial heat in India
The technologies already exist and, for many industries that rely on oil or gas, the economics are increasingly favourable. The main challenge is ensuring that policy and market signals encourage firms to adopt them. Two areas are particularly important. First, the health costs of industrial air pollution remain only weakly reflected in energy prices. Strengthening and enforcing emissions standards for particulate matter, SO₂, and NOx would encourage firms to move away from coal and oil. Market-based approaches such as emissions trading, already piloted in Surat, can reduce pollution at lower cost.
Second, electricity sector reforms are essential so that industry can fully benefit from India’s low-cost solar power. In many states, cross-subsidy surcharges, restrictive open-access rules, and regulatory uncertainty prevent firms from procuring renewable electricity at competitive prices. Reducing these barriers would allow industries to access cheap solar power and make electric heat technologies increasingly attractive.
Combined with targeted pilot projects and financial support for early adopers, these reforms could allow market forces to drive a gradual shift toward cleaner and more secure industrial energy.
A new industrial future defined by clean heat
India no longer has to choose between costly energy imports and the polluted air that has long burdened its industrial regions. Clean heat offers a third path. Powered by domestic sunlight, amplified by heat pumps or stored at high temperatures, it can reshape India’s manufacturing future.
This is India’s chance to build a cleaner, more competitive industrial economy anchored in its abundant energy. Clean heat is not just a technological shift. It can become the foundation of India’s next industrial leap.
Co-authors: Amol Phadke, faculty member at the University of California, Berkeley; Sonali Deshpande and Nik Sawe, researchers at Energy Innovation, a non-partisan energy and climate policy think tank based in San Francisco.
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