Battery Energy Storage System (BESS) tariffs discovered through competitive bidding have seen a sharp decline in recent years, significantly improving the economic viability of large-scale energy storage projects in India, the government informed the Rajya Sabha on Wednesday.
According to data shared by the Ministry of Power, the cost of BESS discovered during tariff-based competitive bidding in 2022–23 was around ₹10.18 per kWh, assuming two charge-discharge cycles per day. In more recent tenders, however, the discovered cost has dropped substantially to about ₹2.1 per kWh without viability gap funding (VGF), provided the storage system operates for two cycles daily. Based on prevailing market trends, BESS is expected to be utilised for around 1.5 cycles per day, which translates to a storage cost of approximately ₹2.8 per kWh.
The ministry noted that average electricity tariffs from recent solar power projects are currently in the range of ₹2.5 per kWh, indicating a narrowing cost gap between renewable generation and battery-based energy storage.
To accelerate adoption and improve affordability, the Ministry of Power is implementing a VGF scheme to support the installation of 13,220 MWh of BESS capacity, with a budgetary allocation of ₹3,760 crore. In addition, a second VGF scheme was launched in June 2025 to facilitate the development of 30 GWh of BESS capacity, backed by financial support of ₹5,400 crore from the Power System Development Fund (PSDF).
Further incentives include a waiver of Inter-State Transmission System (ISTS) charges for co-located BESS projects commissioned by June 2028, applicable for a period of 12 years. For non-co-located BESS projects, ISTS charge waivers are available for projects commissioned up to June 2025, after which the waiver will be reduced annually in graded steps of 25%.
On the manufacturing front, the Ministry of Heavy Industries is implementing the Production Linked Incentive (PLI) scheme under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage. Approved in May 2021 with a total outlay of ₹18,100 crore, the scheme aims to establish 50 GWh of domestic ACC manufacturing capacity, including 10 GWh earmarked for grid-scale stationary storage applications.
The government stated that the PLI scheme is expected to attract investments in domestic cell manufacturing, reduce import dependence and lead to a further reduction in BESS costs over the medium to long term.
The information was provided by the Minister of State for Power, Shri Shripad Yesso Naik, in a written reply to the Rajya Sabha.
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