New Delhi, Dec 15 (IANS) Battery Energy Storage Systems (BESS), which play a key role in supporting renewable energy, are becoming much cheaper in India due to falling costs and strong government support, the Ministry of Power said on Monday.

According to the ministry, the cost of battery storage discovered through tariff-based competitive bidding in 2022–23 was around Rs 10.18 per unit of electricity when the batteries were used twice a day.

In recent tenders, this cost has dropped sharply to about Rs 2.1 per unit even without any government subsidy, assuming two charging and discharging cycles daily.

“The cost of Battery Energy Storage System (BESS) discovered through tariff based competitive bidding during 2022-23 was about Rs 10.18 / kWh, if the storage is used for 2 cycles daily,” the ministry said.

“The cost of BESS discovered through competitive bidding in the recent past has substantially reduced to about Rs 2.1 / kWh without VGF, if the storage is used for 2 cycles daily,” it added.

However, based on current market trends, batteries are expected to be used around 1.5 times a day on average.

At this level of usage, the storage cost works out to nearly Rs 2.8 per unit. This is close to the price of electricity generated from solar power projects, which currently ranges around Rs 2.5 per unit.

This narrowing gap shows that battery storage is becoming more viable and competitive alongside renewable energy.

To further reduce costs and encourage adoption, the government has introduced financial support schemes.

The Ministry of Power is implementing a Viability Gap Funding (VGF) scheme to set up 13,220 MWh of battery storage capacity with budgetary support of Rs 3,760 crore.

In addition, a new VGF scheme was launched in June 2025 to develop 30 GWh of battery storage capacity, supported by Rs 5,400 crore from the Power System Development Fund.

–IANS

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