Solar-Plus-ESS Delivers 95% Clean Power Under ₹6/kWh in India

Solar-Plus-ESS Delivers 95% Clean Power Under ₹6/kWh: Report

By Chitrika Grover/ Updated On Mon, Jun 2nd, 2025

Highlights :

Standalone BESS tender with a two-hour duration in April 2025 is approximately 20% lower than the two tenders held in the second half of 2024
The winning bids ranged from ₹3.0 to ₹3.2 lakh/MW-month; after accounting for the 30% VGF support, the effective auction price was ₹2.2–2.3 lakh/MW-month
Solar + storage systems with two to four hours duration have seen winning bids of 3.1-3.5 INR/kWh.
These costs have come down over 50-60% over the past 18 months, reflecting a drop from November 2023 to April 2025

Solar-Plus-ESS Delivers 95% Clean Power Under ₹6/kWh: Report

India’s recent energy storage auctions have yielded record-low prices, with unsubsidized standalone battery storage bids at ₹2.8 lakh/MW/month and solar-plus-storage bids ranging from ₹3.1 to ₹3.5/kWh, according to a report by the India Energy and Climate Center (IECC).

The report noted that, based on implied solar and storage costs from these bids and bottom-up global cost estimates, a solar-plus-storage system can deliver 24/7 clean power with over 95% availability for under ₹6/kWh. It added that falling battery capital costs and improvements in battery cycle life have significantly reduced the Levelized Cost of Storage (LCOS).

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The report based on its analysis showed, “LCOE of a solar+storage system with 95% availability (no backup), an on-grid solar+storage system with 100% availability (using 5% grid backup and with surplus electricity sold to the grid), and off-grid solar+storage system with 100% availability (using 5% diesel backup and surplus electricity curtailed).”

Sharing its recent findings, the report said, “We find that a solar+storage system with 95% availability costs $54/MWh or 4.5 INR/kWh today. If a grid connection is available, grid backup can be purchased to increase the system capacity factor to 100%, while surplus electricity can be sold to the grid in times of excess, leading to a marginally higher LCOE of $56/MWh or 4.7 INR/kWh. Both options are under 5 INR/kWh, competitive with new coal-fired power plants at the point of injection (i.e., not accounting for inertial and other ancillary services).”

The study further added, “If a grid connection is not available, and diesel backup is used instead, the LCOE is at $74/MWh or 6.2 INR/kWh. Notably, these availabilities are higher than the average coal availability in India of ~85%, which in some states is even lower; therefore, these numbers can be seen as conservative estimates, as the flat block adder to match the normative coal availability would be lower.”

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Plummeting Standalone & Co-located (with solar) BESS Auctions

According to the report, “The recent auction results for storage have been record-breaking: the latest tender for standalone battery energy storage systems (BESS) with two hours’ duration in April 2025 saw a winning bid of 2.8-2.85 lacs/MW/month, without any subsidy like the Viability Gap Funding (VGF).”

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Auction Results

The report based on the auction results revealed, “First, the latest solar+storage auction results showed that the solar Levelized Cost of Electricity (LCOE) is likely around 2.3-2.5 INR/kWh. They comprise the majority of the winning bids and reflect the latest solar costs in India.”

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Additionally, “The remaining 1-1.5 INR/kWh in the SECI auction, as well as the 0.6-1 INR/kWh in the NHPC auction, reflect the storage component, referred to as the “storage adder”. As seen in the build-up, this also allows us to reverse engineer the implied battery capex, which comes out to 114-126 USD/kWh for these two latest co-located solar+storage auctions. As shown in the estimated non-solar hour cost is ₹5.1–6.3/kWh, assuming a solar hour cost of ₹2.3–2.5/kWh and a typical DC solar capacity factor of 20%. This implies that the SECI project (2000 MW solar PV + 1000 MW/4000 MWh BESS), requires storing approximately 40% of daily DC solar generation, while the NHPC project (1200 MW solar PV + 600 MW/1200 MWh BESS), requires about 20%.”

solar-plus-storage-auction

Based on the recent energy storage cost, the report studies, “These storage costs imply that Indian developers are accessing battery packs at prices below $80/kWh and the total storage capex has fallen below $120/kWh for co-located projects with solar and $140/kWh for standalone projects.”

It added, “These price and performance levels are on par with those currently available in China and significantly below those in the United States (US) or the European Union (EU). It appears that India seems to have replicated the success of low-cost solar with battery storage as well, at least on paper. The competitiveness of solar+storage is further corroborated by recent project announcements, such as the $6 billion, 5 GW/19 GWh solar+storage project in Abu Dhabi. Set to be commissioned in 2026, the project is the largest of its kind to date and will provide clean baseload power around the clock.”