Battery Storage Cost Falls: Rs 2.1/Unit, Power Min

New Delhi, Dec 15 (PTI) Batter energy storage system (BESS) cost has fallen steeply to Rs 2.1 per unit from about Rs 10.18 per unit discovered through tariff-based competitive bidding during 2022-23, Parliament was informed on Monday.

The cost of BESS discovered through tariff-based competitive bidding during 2022-23 was about Rs 10.18/kWh, if the storage is used for two cycles daily, a power ministry statement said.

According to the statement, the cost of BESS discovered through competitive bidding in the recent past has substantially reduced to about Rs 2.1/kWh without VGF (viability gap funding), if the storage is used for two cycles daily.

However, it stated that based on the market trend, it is expected that BESS will be utilised for 1.5 cycles per day, which corresponds to storage cost of Rs 2.8/kWh.

Based on the recent tenders, average rate of electricity from solar projects is in the range of Rs 2.5/kWh.

To make battery storage affordable, the Ministry of Power is administering a VGF Scheme for setting up 13,220 MWh of BESS capacity with budgetary support of Rs 3,760 crore.


Additionally, Ministry of Power, in June 2025, launched another VGF scheme for development of 30 GWh of BESS capacity, with a financial support of Rs 5,400 crore, through Power System Development Fund (PSDF).

Also, waiver of Inter-State Transmission System (ISTS) charges is provided for 12 years for co-located BESS projects to be commissioned by June 2028.

For non-co-located BESS projects, Inter-State Transmission System (ISTS) charges waiver is granted for projects that will be commissioned before June 2025 and thereafter, waiver will be reduced annually in graded steps of 25 per cent.

The Ministry of Heavy Industries is implementing the Production-Linked Incentive (PLI) scheme namely 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage', to establish 50 GWh of domestic Advanced Chemistry Cell manufacturing capacity, ofwhich 10 GWh is earmarked for Grid Scale Stationary Storage (GSSS) applications.

The scheme was approved in May 2021 with a total outlay of Rs 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.

This information was shared by the Minister of State for Power, Shripad Yesso Naik, in a written reply to the Rajya Sabha on Monday.