Renewable energy sector experts have opined that battery energy storage systems (BESS) will likely phase out power banking in the coming years.

Speaking at Mercom India’s Coimbatore C&I Clean Energy Meet recently, they said energy storage solutions can provide an assured power supply and eliminate the costs associated with running diesel generators.

They said BESS has the potential to phase out power banking and reduce the load on distribution companies, as energy storage is likely to become more affordable.

Energy storage systems are gaining traction in the open access and rooftop solar segments. However, bundling storage with renewable energy remains an expensive proposition.

Seshagiri Meka, Managing Director at Winsol Cleantech, said that for an investment of ₹15 million (~$172,909.65)/MW for a 1,000 kWh energy storage solution, accounting for a 365-day life cycle and 15% discharge loss, the net utilization is 300,000 units.

He added that considering a loan with a 10% interest rate and a ten-year battery life, the cost of the solution reaches ₹3 million (~$34,585) or ₹10 (~$0.115)/kWh, which is still expensive for business.

“China is working to reduce BESS costs to ₹6 million (~$69,170) to ₹7 million (~$80,699),” he said.

He visualized a scenario where consumers could source power at ₹3 (~$0.034)/kWh to ₹4 (~$0.046)/kWh. The banking of power will be phased out by 2027, and the commercial and industrial (C&I) sector will utilize power during peak hours through BESS.

“After two years, at least 20% of the power projects will have BESS,” said Meka.

He suggested that large renewable projects, such as systems with 20 MW capacity spread out over 45-50 acres, must allocate additional 1 acre per megawatt for BESS integration in future.

Rooftop solar installers who spoke at the meet also noted that companies aiming to implement the net-zero concept prefer BESS.

Terance Alex, CEO and Founder, Wattsun Energy, said, “The cost of a solar system is roughly ₹3 (~$0.034)/kWh to ₹4 (~$0.046)/kWh. However, along with BESS, you will have to add another ₹4 (~$0.046)/kWh to ₹5 (~$0.057)/kWh. Two years ago, the BESS prices were ₹9 (~$0.103)/kWh to ₹10 (~$0.115)/kWh, and the price has since decreased. This provides confidence to business owners to shift to storage as the other alternatives are diesel power generators.”

Alex pointed out that adding BESS to solar projects can save business owners ₹10 (~$0.115)/kWh to ₹15 (~$0.172)/kWh, considering the cost of operating diesel gensets is around ₹21 (~$0.242)/kWh.

Industry experts stated that adding a BESS to an existing renewable energy project requires an additional investment of ₹3 million (~$34,585.2) to ₹5 million (~$57,642).

“If you look at the life of BESS utilizing lithium-ion batteries, you can get 6,000 to 8,000 cycles. The return on investment will take three to four years at the current BESS prices,” said Alex.

He also stated that BESS could serve as a solution to distribution companies’ concerns about grid stability due to increased renewable energy injection. Even the residential consumers are contemplating BESS due to frequent power outages in certain states.

Savings in Open Access and Rooftop Solar Projects

The demand for open access solar remains high in the C&I sector. Businesses prefer group captive projects due to the limited technical knowledge required by the power offtaker.

Speakers opined that the payback period in group captive solar projects was as low as eight months.

Rahul Makahaniya, CMO at Soleos Solar Energy, stated that consumers opting for captive or group captive mode to procure solar energy can realize savings up to ₹3 (~$0.034)/kWh to ₹3.5 (~$0.04)/kWh.

“In a captive solar project, your equity payback period is nearly three and a half years, and the project payback period is six to seven years. Under the group captive mode, the payback period is eight months. Group captive is the driving force for large solar projects in the open access segment,” said Makahaniya.

Group captive power projects also remain a cost-effective option for companies that are hesitant to own power assets.

Rooftop solar projects also see demand due to their better utilization of empty spaces.

Sanjay Kapoor, President of Marketing and Business Development at Sungreen Power and Renewable Energy, said that installers can utilize up to 80% to 100% of the space in larger rooftops.

Alex added that advancements in solar module technology have led to higher power generation from rooftop space. He said that earlier installers needed 100 sq ft for a 1 kW solar project, which has now come down to 60 sq ft. The use of TOPCon modules and modules with higher wattage capacity has reduced the requirement for larger spaces for rooftop solar systems.

Sandeep Anaparthi, CEO and Co-Founder at Vyomaa Energy, stated that a rooftop solar project can yield significant savings for the C&I sector.

He said C&I consumers can source power from rooftop solar installations at ₹4 (~$0.046)/kWh to ₹ 5 (~$0.057)/kWh. A good-quality rooftop system of 100 kW, featuring a Tier 1 panel, a reliable inverter, and a trusted energy partner, would cost approximately ₹4.5 million (~$ 51,872.90) to ₹5.5 million (~$63,400.21).

“In places like Coimbatore, a 100 kW system would generate up to 150,000 to 170,000 units per year. You can save up to ₹1.1 million (~$12,680.04) to ₹1.3 million (~$14,985.5) a year, and the payback period will be four to five years. The companies can also benefit from accelerated cost depreciation on solar power projects,” added Anaparthi.

Mercom India will host its next C&I Clean Energy Meet in Hyderabad on August 22, 2025. If you are a C&I business unit, clean energy solutions provider, component manufacturer, lender, investor, or industry associate, you should attend this event. Facility and plant managers, C-level executives of C&I businesses, engineers, procurement managers, and other decision-makers will especially gain from meeting the experts and networking. You can register for free here.

Mercom is also hosting the fifth edition of its Renewables Summit on July 24-25 this year at the Hyatt Regency, New Delhi. It brings together all the stakeholders who are shaping India’s renewable energy industry. You can register for the Summit here.