Unreliable grid supply drives consumers towards deploying power back-up solutions such as uninterrupted power systems and diesel generators. Solar plus energy storage becomes an increasingly attractive alternative as it can provide a degree of energy security and independence to the consumer. It is cheaper, quieter, takes up less space, avoids emissions and has a shorter response time compared to diesel generators.
In 2019-20 India imported batteries worth USD 1.2 billion making this sector heavily dependent on foreign manufacturing capacities. To reduce the dependence on imports and develop the local market, Niti Aayog, a Government of India think tank proposed setting up Giga capacity battery factories aggregating a capacity of 50 GWh over the next ten years at a projected cost of USD 5 billion. The Indian Government has proposed to offer subsidies to the tune of INR 700 Crore a year and also provide incentives such as the benefit of entire depreciation in one go and zero import duty on lithium, iron and cobalt to battery manufacturing industries.
Consumers, in India particularly, are highly cost sensitive. The recent decrease in the cost of both solar PV and Li-ion battery storage and an increasing commitment by a larger share of the population to shift towards sustainable solutions is expected to result in an increased uptake of BtM solar and energy storage systems.
This report compares the cost of supply from the grid, partial supply from solar and partial supply from solar plus energy storage (lithium-ion) on the consumer side of the service connection (behind-the-meter) for selected HT consumer types in Tamil Nadu.