Battery energy storage cost falls to ₹2.1/unit from ₹10.18 in 2022-23: Govt

The cost of battery energy storage systems (BESS) has fallen steeply to ₹2.1 per unit from about ₹10.18 per unit, the government informed the Parliament on Monday.

In a written reply to Rajya Sabha, Minister of State for Power Shripad Naik said that during 2022-23, the cost of BESS discovered through tariff-based competitive bidding was around ₹10.18 per kWh when storage was used for two cycles daily.

However, in recent bids, the discovered cost has substantially declined to about ₹2.1 per kWh without viability gap funding (VGF), if the storage is used for two cycles daily.

He said that based on prevailing market trends, BESS is expected to be utilised for about 1.5 cycles per day, which corresponds to a storage cost of around ₹2.8 per kWh.

The average rate of electricity from recent solar power projects is in the range of ₹2.5 per kWh.

To further bring down the cost of battery storage, Naik said the Ministry of Power is implementing multiple support measures, which include a VGF scheme for setting up 13,220 MWh of BESS capacity with budgetary support of ₹3,760 crore.

Another VGF scheme was launched in June 2025 for the development of 30 GWh of BESS capacity, with financial support of ₹5,400 crore through the Power System Development Fund (PSDF).

The minister also said that inter-state transmission system (ISTS) charges are being waived for 12 years for co-located BESS projects commissioned by June 2028.

For non-co-located BESS projects, ISTS charge waiver is available for projects commissioned before June 2025, after which the waiver will be reduced annually in graded steps of 25%.

On the production-linked incentive (PLI) scheme, Naik said the Ministry of Heavy Industries is implementing the ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ to establish 50 GWh of domestic ACC manufacturing capacity. Of this, 10 GWh has been earmarked for grid-scale stationary storage applications.

The scheme was approved in May 2021 with a total outlay of ₹18,100 crore.

The PLI scheme would encourage investment in the domestic manufacturing of cells for grid-scale applications, reduce dependency on imports and eventually reduce the cost of BESS in future, it stated.