Battery Storage System Costs High, But ROI Remains Attractive: Mercom Webinar

Evolving battery technology and softer prices in near-term will make adoption faster


The steep upfront investment required for lithium-ion battery storage systems is the major impediment in their large-scale deployment with solar projects even though the return on investment (ROI) is attractive, industry experts said at a webinar hosted by Mercom India.

The panelists for the ‘Battery Storage with Rooftop Solar Systems: An Untapped Market in India’ webinar comprised Shantanu Sirsath, Technical Head India, Growatt New Energy, NP Ramesh, Chief Operating Officer at Orb Energy, Ankur Gupta, VP-New Products & Technology of Amplus Solar, and Randeep Bora, Vice President of SunSource Energy. Priya Sanjay, Managing Director, Mercom India, moderated the session.

High battery storage cost

The panelists agreed that the cost of battery storage systems was a challenge in a price-sensitive market like India. Sirsath said that the cost of lithium-ion batteries was a challenge for widespread adoption, but Growatt was expecting better growth in demand in the coming years.

Bora said that it was expected that the cost of storage systems would come down, but it had risen by over 40% since 2019, defying the forecast that the price decline would mirror the trajectory of solar modules.

Bora added that the hardware cost for the system, apart from the batteries, is about 40% of the battery cost, which brings up the total cost for the storage solution.

ROI still attractive

However, while the battery storage cost has shot up, so have fossil fuel prices. This has ensured the ROI has remained attractive over the last few years.

“The lithium-ion batteries that we provide come with a standard 10-year warranty. The customer doesn’t have to look after the storage part for the next decade. While the storage capacity will reduce due to the aging effect over time, the overall competence considerably increases,” Sirsath said.

While ROI depends on how the battery storage system is used, the payback period it could be 4-6 years on average, Sirsath said.

Hurdles in Large-scale adoption

 One of the main reasons for high battery storage system prices is the lack of widespread adoption.

Gupta said that the sector needed trusted partners for large-scale deployments. “Currently, every storage solution is designed as a project instead of as a product.”

Gupta added that battery storage systems must become standardized products like diesel gensets. “For large-scale deployments, battery storage has to evolve into a product for the market where consumers can just buy it off the shelf and deploy it,” he said.

The panelists agreed that adopting battery storage systems would eventually happen because of growing energy demand, cutback on fossil fuel, and the fact that solar energy is not available during the night.

“Industries might be slower to adopt it because it’s a sizeable battery that one needs, and the power requirement is quite high. But if one could entirely replace the DG (diesel generators), there would be a higher demand for storage from the industries,” Ramesh said.

Speaking about different types of inverters, Sirsath said that one of Growatt’s products allows a consumer to connect the batteries according to requirements, and a complete on-grid system can work as a battery storage system. “We have launched a single-phase system of up to 6 kW capacity in the market and are working on three-phase systems,” he added.

With evolving technology and increased demand, commercial & Industrial consumers and independent users could soon start adopting battery storage systems as part of solar rooftop solutions.

Click here to view the webinar recording.