Access to reliable and affordable energy is a key barrier limiting the adoption of controlled-environment farming in rural regions. This study evaluates the performance of Mushroom Kothi, a low-cost IoT-enabled cultivation chamber, when powered by solar photovoltaic panels, and quantifies its environmental benefits through energy use analysis and life cycle assessment (LCA). Experiments were carried out in Saeedpur Khas village, Prayagraj (Uttar Pradesh), where the device was operated under two scenarios: (i) conventional grid electricity supply and (ii) off-grid solar panels with battery backup. Power consumption was continuously monitored across full mushroom crop cycles, and energy savings were estimated against regional grid electricity baselines. In addition, a streamlined LCA was performed using the AWARE method to assess water stress implications and broader sustainability impacts. Results showed that the device consumed less than 100 W peak, and a 150 W solar panel with a small battery was sufficient to power chamber operations throughout the cultivation cycle. Solar integration reduced grid dependency by over 85%, resulting in significant cost savings and estimated CO₂ emission reductions of 0.35–0.45 kg per kg of mushrooms produced. The AWARE analysis further indicated lower water stress impacts compared with conventional open-shed cultivation due to improved microclimate regulation. These findings demonstrate that solar-powered controlled chambers can provide an energy-efficient, climate-resilient, and environmentally sustainable solution for smallholder mushroom farming. The approach holds particular relevance for the Global South, where energy insecurity and resource constraints are major challenges to scaling sustainable agriculture.