Have Battery Storage Costs Really Dropped from Rs 10.18 to Rs 2.1 per Unit in Just 2 Years?
Synopsis
The remarkable decline in battery storage costs from Rs 10.18 to Rs 2.1 per unit reflects India's commitment to renewable energy. This significant drop, driven by government initiatives, highlights the growing viability of Battery Energy Storage Systems (BESS) and their crucial role in the energy transition. Learn more about this transformative shift.
Key Takeaways
Battery storage costs have decreased significantly , dropping from Rs 10.18 to Rs 2.1 per unit.
Government backing is crucial in driving these cost reductions.
Battery usage is projected to average 1.5 times daily .
Lower costs enhance the competitiveness of renewable energy .
The VGF scheme supports the establishment of battery storage capacity.
New Delhi, Dec 15 (NationPress) Battery Energy Storage Systems (BESS), essential for enhancing renewable energy capabilities, are witnessing a significant decline in costs across India, attributed to decreasing prices and robust government initiatives, according to the Ministry of Power.
The ministry reported that during the 2022–23 period, the price for battery storage identified through competitive tariff bidding was approximately Rs 10.18 per unit for twice-daily usage.
Recent tenders have seen this price plummet to around Rs 2.1 per unit, even without government subsidies, based on two charging and discharging cycles each day.
“The tariff-based competitive bidding revealed that the Battery Energy Storage System (BESS) cost was around Rs 10.18 per kWh, assuming two cycles daily,” the ministry disclosed.
“However, the recent competitive bidding has led to a considerable reduction in the BESS cost to approximately Rs 2.1 per kWh without the Viability Gap Funding (VGF), based on the same usage pattern,” it added.
Given current market dynamics, it is anticipated that batteries will be utilized about 1.5 times a day on average.
At this usage rate, the storage cost averages nearly Rs 2.8 per unit, which is comparable to the electricity generated from solar projects, currently priced around Rs 2.5 per unit.
This reduction in costs indicates that battery storage is becoming increasingly competitive alongside renewable energy solutions.
To stimulate further adoption and lower costs, the government has initiated financial assistance programs.
The Ministry of Power is rolling out a Viability Gap Funding (VGF) scheme aimed at developing 13,220 MWh of battery storage capacity, backed by a budget of Rs 3,760 crore.
Additionally, a new VGF scheme was introduced in June 2025 to create 30 GWh of battery storage capacity, supported by Rs 5,400 crore from the Power System Development Fund.
Point of View
It's imperative to note that the significant decrease in battery storage costs is a promising development for India's renewable energy sector. With government initiatives in place, this trend not only enhances energy competitiveness but also positions India as a leader in sustainable energy solutions. The nation stands to benefit greatly from these advancements.
NationPress
10 May 2026
Frequently Asked Questions
What is the current cost of battery storage in India?
As of recent tenders, the cost of battery storage has dropped to approximately Rs 2.1 per unit.
How has government support influenced battery storage prices?
Government initiatives and financial assistance schemes have played a crucial role in reducing battery storage costs significantly.
What is the expected usage frequency of batteries going forward?
Current trends suggest that batteries will be used around 1.5 times a day on average.
What are the implications of reduced battery storage costs?
Lower costs make battery storage more competitive with renewable energy, promoting wider adoption and a shift towards sustainable energy sources.
What is the Viability Gap Funding (VGF) scheme?
The VGF scheme is a government initiative aimed at establishing battery storage capacity with financial backing to enhance renewable energy capabilities.
