Per kWh Cost of BESS Has Fallen Steeply: MoS Power

India’s battery storage economics have turned sharply competitive, with BESS tariffs falling to about INR 2.1/kWh through competitive bidding for 2 cycles daily from about INR 10.18/kWh in 2022-23, stated Minister of State for Power Shripad Yesso Naik. VGF support, transmission waivers, and PLI-led domestic manufacturing can push it further down.

December 16, 2025. By Mrinmoy Dey

The cost of Battery Energy Storage System (BESS) discovered through competitive bidding has substantially reduced to about INR 2.1/kWh without VGF, if the storage is used for 2 cycles daily from INR 10.18/kWh discovered during 2022-23, stated Minister of State for Power, Shripad Yesso Naik, in a written reply in the Rajya Sabha.

He further added 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 INR 2.8/kWh. Based on the recent tenders, average rate of electricity from solar projects is in the range of INR 2.5/kWh.

Naik stated that in order 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 INR 3,760 crore. Additionally, Ministry of Power, in June, 2025, has launched another VGF scheme for development of 30 GWh of BESS capacity, with a financial support of INR 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, ISTS charges waiver is granted for projects which will be commissioned before June 2025 and thereafter, waiver will be reduced annually in graded steps of 25 percent.

Naik further added that 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, out of which 10 GWh is earmarked for Grid Scale Stationary Storage (GSSS) applications. The scheme was approved in May 2021 with a total outlay of INR 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, asserted Naik.

Tags:

BESS deployment in India

PLI Scheme for Grid Scale Storage