Home Batteries Could Cut Rooftop Solar Exports by 90 Percent, Says Report

India’s residential rooftop solar installations could reduce daytime electricity exports to the grid by 85–90 percent by adding batteries, but financial incentives are needed to make the investment viable for households, according to an analysis by energy think tank Ember.

The analysis examines the economics of pairing a 5 kWh battery with a typical 3 kW residential rooftop solar system. It finds that while batteries can help households shift surplus daytime solar generation to evening consumption, the additional investment significantly extends the system’s payback period under the current net metering framework.

India’s rooftop solar capacity has tripled since the launch of the PM Surya Ghar: Muft Bijli Yojana in 2024, reaching 30.7 GW by July 2026. This represents nearly 19 percent of the country’s total installed solar capacity of 165 GW. More than 5 million households have adopted rooftop solar under the scheme, according to Ember.

Residential electricity consumption typically remains relatively low during the middle of the day and rises in the evening. Consequently, households export surplus solar power to the grid during daylight hours and draw electricity back after sunset.

Under the existing net metering framework, a unit of electricity exported during the day is credited against a unit consumed later. This arrangement effectively allows households to use the grid as a virtual battery without having to invest in physical storage.

However, the arrangement can create a financial disadvantage for distribution companies (DISCOMs), which credit daytime solar exports against electricity that may need to be purchased at higher prices during evening demand periods.

Ember’s modelling considers a household consuming 350 units of electricity a month and operating a 3 kW rooftop solar system. The system costs INR 87,000 after accounting for the INR 78,000 subsidy available under PM Surya Ghar and has a payback period of 3.3 years.

Adding a 5 kWh battery would reduce daytime exports by approximately 85–90 percent, shifting around 1,600–1,800 units of electricity annually to evening consumption. However, the higher upfront investment would extend the payback period to more than nine years.

The analysis argues that households have little financial incentive to purchase batteries when the grid already provides a mechanism to bank surplus solar generation and withdraw equivalent electricity later.

A subsidy covering 50 percent of battery capital costs could reduce the payback period of a rooftop solar-plus-storage system to 6.3 years, according to Ember. The think tank has proposed extending financial support for hybrid rooftop solar systems under the next tranche of PM Surya Ghar.

Subsidising hybrid systems for even half of the scheme’s existing target of 10 million households could create 15–25 gigawatt-hours (GWh) of distributed storage capacity, the analysis estimates. Such storage could help shift electricity consumption away from periods of high solar generation and provide additional flexibility to the power system.

Ember has also suggested that state governments consider additional subsidies, building on initiatives in Tamil Nadu and Bihar. Such support could be directed specifically towards the additional cost of batteries rather than providing further assistance for solar installations alone.

The analysis examines how possible changes to net metering rules could affect the economics of household battery storage. Under one scenario, a 40 percent cap on banked solar exports would bring the payback period of a subsidised solar-plus-battery system to 6.5 years.

In another scenario, households would be unable to withdraw banked solar credits during the 6 pm to 10 pm peak period and would face a 20 percent peak surcharge. Under these conditions, the payback period would fall to 5.7 years after subsidies, according to the analysis.

Ember said that installing batteries alongside rooftop solar systems could also prepare households for future demand-response programmes, through which consumers may be encouraged to adjust electricity consumption in response to grid requirements.

Kerala, Maharashtra and Uttar Pradesh have begun exploring rooftop solar-plus-battery systems, while the Central Electricity Authority has suggested that DISCOMs could mandate two hours of storage alongside rooftop installations.

Ruchita Shah, energy analyst for Asia at Ember, said that India could integrate storage as rooftop solar capacity expands instead of waiting for grid-related challenges to emerge. She said that the value of rooftop solar increasingly depends not only on how much electricity is generated but also on when it is consumed.

The analysis concludes that targeted battery subsidies could help overcome the upfront cost barrier for households while supporting greater integration of rooftop solar into the electricity system.