The Future is Electric: Building a Just Energy Transition for Sri Lanka

Home to 22 million people, the island nation of Sri Lanka is uniquely vulnerable to economic disruption and the threats posed by anthropogenic climate change. The country’s economic growth and the resilience of its critical infrastructure is hampered by its reliance on expensive fossil fuel imports for electricity and fuel, a power grid stretched to the breaking point, and frequent intermittent power cuts. In order to drive sustainable socioeconomic development, uphold its environmental commitments, and build a resilient society that can weather the impact of the climate crisis, Sri Lanka must achieve a just green transition that empowers the most vulnerable and that provides equitable opportunities for prosperity. This means democratizing access to electricity through rooftop panels and battery storage, semi-independent community-managed microgrids, and the equitable electrification of transportation and everyday life.

Electricity is expensive, but so is not having any

The Sri Lankan government has committed to generating 70% of its electricity through renewable power sources by 2030, with full carbon neutrality (i.e. 100% renewable generation) by 2050 (1). This priority must contend with a population that continues to grow wealthier – and therefore demands more electricity for personal use and commercial purposes. While historically Sri Lanka has relied upon large and small hydrogeneration plants for its electricity, the majority of its appropriate rivers are already dammed and are unlikely to host additional plants in the future. Coal and fuel oil plants produced about half of all electricity generated in 2023, serving as the backbone for the national grid and (mostly) unaffected by drought or inclement weather (2). Yet as Sri Lanka’s 2022 sovereign default showed, economic difficulties can imperil the flow of imported fossil fuels into the country, leading to rolling blackouts and socioeconomic turmoil. For a country that relies on tourism, light industry, and IT services, power cuts present an existential threat – and in fact were a major contributing factor to the 2022 Aragalaya protests that overthrew the government (3).

Large grid-scale renewable projects (i.e. wind or solar farms) in Sri Lanka are expensive and difficult to put together for a cash-strapped government; land rights, building more transmission lines, and obtaining external loans are all major obstacles. Future generation growth as projected by the Ceylon Electricity Board (CEB, until recently the vertically-integrated national power company, now to be restructured into separate state-owned entities) emphasizes the role of natural gas turbines, which are projected to convert to green, clean-burning hydrogen in the long run, and rooftop solar installations by individuals and the private sector with some accompanying grid-level battery storage (4). This presents an effective model for retiring coal plants in the long run, but given the uncertainties around the cost effectiveness of green hydrogen may not be an ideal pathway to true net zero – and the usage of large centralized power plants will do nothing to ease the burden on the congested, fragile grid.

While natural gas (predominately methane, CH4) is often touted as being cleaner than coal – and this is true at the point of emission, as burning methane results in less carbon dioxide – its extraction transportation is inherently polluting due to significant evaporation and leakage from pipelines and tankers (5). Methane is a far more potent greenhouse gas than carbon dioxide, meaning that even small amounts can have an outsized atmospheric impact. Dependency on imported natural gas would result in Sri Lanka’s electricity supply remaining vulnerable to trade disruptions and financial crises. Sri Lanka does have proven natural gas and oil reserves in the Mannar basin off the northwestern coast and bordering India (6), but extraction is prohibitively expensive and would result in significant environmental damage, not to mention stirring up unrest in the Tamil-majority north (7).

Power to the people: distributed solar generation

An expanded renewables buildout backed by battery storage, by contrast, would likely be cheaper in the long run and insulate Sri Lanka from fossil fuel supply shocks like currency volatility and geopolitical factors. The government’s Sooriyabala Sangaramaya (“Battle for Solar Energy”) policy initiative, launched in 2016, has been instrumental in kickstarting the growth of rooftop solar in Sri Lanka, offering a range of subsidies and tax credits to incentivize its adoption. Customers are offered the option to sell some or all of the electricity they generate to the national grid at a fixed rate for around a decade, although said fixed rate has been steadily decreasing (8). For those with sufficient capital to invest in a rooftop panel system, this is an attractive way to leverage roof space to generate a profit – with breakeven within just a few years (9). The attractiveness is compounded by Sri Lanka’s frequent intermittent power cuts, byproducts of a volatile national grid and a poorly maintained network; many businesses have a mix of diesel generators and solar panels as backups in the event of blackouts or disasters (10). Cyclone Ditwah in December 2025 wrought significant damage upon the island, disrupting electricity supplies around Sri Lanka, yet rooftop panels survived unscathed and acted as islands of power for those displaced and seeking to charge their mobile devices. Solar setups also proved resilient and crucial to maintaining telecommunications despite grid power outages (11).

Sooriyabala Sangaramaya has been a qualified success, resulting in 1,700 MW of rooftop solar being installed in just under a decade (12). Yet this success has largely been concentrated among the upper middle class, with small rooftop setups costing around a year’s income for the median household (2025 price of LKR 940,000 USD $3,100, including installation etc. for a 5 kW system) – far too much for the average family. Wealthy households tend to cluster in a few neighbourhoods, resulting in a bottleneck in the grid; excess electricity produced and sold into the national electricity network must be carried on transmission lines that are already at capacity, forcing the CEB to deny additional applications for rooftop solar installation in wealthy neighbourhoods lest they overwhelm the national system (13). Overproduction of solar electricity has in fact already been deemed culpable for a nationwide blackout in early 2025, where voltage fluctuations exacerbated by solar systems disconnecting knocked out power to the entire island for six hours, followed by days of rolling blackouts as the grid recovered (14). This blackout was initially erroneously blamed on a monkey (15).

Efforts are being made therefore to incentivize the installation of individual battery systems to “bank” excess daytime solar generation and then sell it back into the grid after nightfall, especially during the 6-10pm post-sunset peak. The CEB intends to pay 45.80 LKR (USD $0.15) per kWh of battery-stored electricity sold back into the grid, a significant increase from the daytime solar rate of 19 LKR (USD $0.06) per kWh (16). Yet battery storage systems are even more expensive, and in Sri Lanka face a whopping combined import duty and value-added-tax rate of 45%, pushing them out of reach of the majority of the population.

A just transition: the way forward

Distributed generation in the form of rooftop solar and semi-independent microgrids (standalone solar-plus-battery systems that can operate independent of the national grid) can democratize electricity (17), allowing for individuals and communities to manage their own power while minimizing expenses. These setups reduce risks from economic and physical disruption, serve as passive secondary income sources, and improve resilience in the face of climate change and natural disasters (18).

While the prices and environmental costs of solar photovoltaic panels and battery storage have dropped precipitously in the past decade due largely to Chinese innovation and mass production (19), material conditions in Sri Lanka’s marginalized communities mean that rooftop solar and storage remain out of reach for the most vulnerable. External sources of funding from the government or multilateral development institutions like the Asian Development Bank (ADB) can subsidize these costs to an extent; ADB-funded microgrids have seen success for Sri Lankan university campuses (20) and remote islands (21), thereby presenting a model for follow-on projects for fishing villages and rural communities with limited grid access. Decentralizing the grid while pushing control over electricity down to the community level through collective decision-making results in more inclusive institutions and a more equitable energy transition. Community microgrids, when packaged with capacity-building training programming, can help marginalized people upskill and incentivize investment in their own communities, while also offering customized solutions to local issues (22).

The rapid growth in electric vehicles in Sri Lanka underscores the need to expand electricity generation and charging infrastructure, but at the same time presents an opportunity to soak up excess solar electricity during the day – and in doing so act as a fleet of distributed batteries that help balance the grid (23). While relatively expensive Chinese-made BYDs (starting at LKR 10.75 million, USD $35,000) (24) and BAWs (LKR 4.7 million, USD $15,500) (25)xxv are popular among the urban upper middle class in Colombo, a just energy transition for Sri Lanka by necessity must result in the electrification of transportation for all, not merely the wealthy. The ubiquitous Tuk-Tuk three-wheeler – at once a taxi, family vehicle, cargo hauler, and delivery vehicle – presents the greatest opportunity for EV proliferation, especially for working-class families and more rural communities. The UNDP has funded a pilot electric Tuk-Tuk conversion project in Colombo, with estimated cost savings of LKR 30,500 ( USD $100) per month compared to petrol-fueled models – thus paying itself off within a year or two (26). Concessional financing from the private sector can accelerate the electric conversion in the rest of the country, with government and third-party support, especially as charging stations rapidly proliferate outside the capital.

Electricity is a human right and is the foundation for sustainable, resilient development (27). A just energy transition for Sri Lanka therefore means universal access to affordable, reliable electricity irrespective of income or location, a rapid reduction in carbon emissions with an eye to net zero, and a society in which every community can safely weather the impacts of anthropogenic climate change. The international community must work to support the Sri Lankan people and state in achieving this just transition, with its success serving as a model for the rest of the Global South.

Footnotes

1. Public Utilities Commission of Sri Lanka (PUCSL) (n.d.): Electricity: Quality, Environment and Renewable Energy: https://www.pucsl.gov.lk/electricity/quality/environment-and-renewable-energy/.
2. International Energy Agency (IEA) (n.d.): Sri Lanka: Country Profile: https://www.iea.org/countries/sri-lanka.
3. Wong, Tessa & Ranga Sirilal (2022, July 12): “Sri Lanka Crisis: How the Country Ran Out of Fuel, Food and Medicine,” BBC: https://www.bbc.com/news/world-asia-62140378.
4. Ceylon Electricity Board (CEB) (2025, May): Long Term Generation Expansion Plan 2025–2044 https://www.ceb.lk/publication-media/planing-documents/140/en.
5. Howarth, Robert W (2024, October 3): “The Greenhouse Gas Footprint of Liquefied Natural Gas (LNG) Exported from the United States.” Energy Science & Engineering 12(10): 1–12. https://doi.org/10.1002/ese3.1934.
6. The Morning Telegraph (2025, October 6): “Sri Lanka’s $267 Billion Offshore Oil and Gas Gamble: Is the Island Finally Ready to Drill?” The Morning Telegraph: https://themorningtelegraph.com/33941/.
7. Daily Mirror (2025, June 18): “‘Halt and Suspend Disastrous Projects!’: A Plea from People of Mannar,” Daily Mirror: https://www.dailymirror.lk/print/news-features/Halt-and-suspend-disastrous-projects-A-plea-from-people-of-Mannar/131-311852.
8. Ministry of Power and Energy, Sri Lanka (n.d.): Soorya Bala Sangramaya: https://www.energy.gov.lk/en/soorya-bala-sangramaya.
9. Liyanage, Januth (2025, March 15): Data from Our Solar System. Board of Investment of Sri Lanka: https://invest-lanka.lk/data-from-our-solar-system/.
10. Manoraj, P, P Sridarran, and M N U Maddakandage (2023): “The Impact of Power Interruptions on Multi-Storey Commercial Buildings in Sri Lanka.” In Conference Proceedings, 231–44. University of Moratuwa, Sri Lanka. https://uom.lk/sites/default/files/fmf/files/Conference%20Proceedings-231-244_1.pdf.
11. Shaheid, Faizer (2025, December 7): “Communications outage: Government to push for national standards,” The Morning: https://www.themorning.lk/articles/Oa16gtsRAMrZcdbSbmPH
12. The Morning (2025, May 16): “Sri Lanka’s Renewable Energy Push: Progress and Challenges,” The Morning: https://www.themorning.lk/articles/6ZtlzqFg8dR6M1cb7fSz.
13. Mudugamuwa, Maheesha (2025, January 12): “Renewable Energy: Large-Scale and EOI Projects on Hold?” The Morning: https://www.themorning.lk/articles/oJGlnetGgWIInhHNqpKK.
14. Ada Derana (2025, February 18): “Sri Lanka to Add 1,000 MW of Renewable Energy by 2026,” Ada Derana: https://www.adaderana.lk/news.php?nid=105894.
15. Wright, George & Kelly Ng (2025, February 10): “Sri Lanka’s Economic Crisis: What’s Next?” BBC: https://www.bbc.com/news/articles/c8d92n28pqjo.
16. EconomyNext (2025, June 28): “Sri Lanka to Pay Rs45-80 a Unit for Battery Solar Power in the Night,” EconomyNext: https://economynext.com/sri-lanka-to-pay-rs45-80-a-unit-for-battery-solar-power-in-the-night-227630/.
17. Corbett, Lawrence W, Charles Weber & Tim Anderson (2022): “The Democratization of Energy through Neighborhood Microgrids.” In 2022 Portland International Conference on Management of Engineering and Technology (PICMET) pp 1-9: https://doi.org/10.23919/PICMET53225.2022.9882895.
18. Salam, Izhar Us, Muhammad Yousif, Muhammad Numan & Moatasim Billah (2024): “Addressing the Challenge of Climate Change: The Role of Microgrids in Fostering a Sustainable Future—A Comprehensive Review,” Renewable Energy Focus 48: 100538. https://doi.org/10.1016/j.ref.2024.100538.
19. Xin, Ling (2025, October 10): “Chinese Team Makes ‘Decisive Step’ towards Holy Grail of Next-Gen Batteries,” South China Morning Post: https://www.scmp.com/news/china/science/article/3328416/chinese-team-makes-decisive-step-towards-holy-grail-next-gen-batteries.
20. ThingsNode (n.d.): Microgrid Project of the University of Moratuwa. ThingsNode: https://thingsnode.cc/portfolio-item/microgrid-project-of-the-university-of-moratuwa/.
21. IMAX-PWR (n.d.): 1MW Sri Lanka Off-Grid Microgrid Project: https://imax-pwr.com/1mw-sri-lanka-off-grid-microgrid-project/.
22. Warneryd, Martin and Kersti Karltorp (2022): “Microgrid Communities: Disclosing the Path to Future System-Active Communities.” Sustainable Futures (4): 100079. https://doi.org/10.1016/j.sftr.2022.100079.
23. Rueter, Gero (2024, December 27): “How EVs Can Store Energy for Homes and Power Grids,” DW: https://www.dw.com/en/how-evs-can-store-energy-for-homes-and-power-grids/a-71171661.
24. John Keells CG Auto (2025): BYD Dolphin Dynamic 49: https://www.johnkeellscgauto.com/product/byd-dolphin-dynamic-49/.
25. Brownes EV (2025): BAW E7 EV. https://www.brownsev.com/baw/e7-ev/.
26. United Nations Development Programme (UNDP) (n.d.): eTukTuk. UNDP: https://www.undp.org/srilanka/etuktuk.
27. Banga, Ajay (2025, June 26): “Remarks by World Bank Group President Ajay Banga at the Signing of a Partnership Agreement with IAEA Director General Rafael Grossi,” World Bank: https://www.worldbank.org/en/news/speech/2025/06/26/remarks-by-world-bank-group-president-ajay-banga-at-the-signing-of-a-partnership-agreement-with-iaea

Photo credit: Ryan Ngai, 2025 | Rooftop solar panels are now a common sight in Sri Lanka.