For Low Tension (LT) C&I consumers of Tamil Nadu, Solar plus energy storage systems offer cost-effective and financially viable options. We will dive deep to understand the full potential of solar plus energy storage solutions in Tamil Nadu.

In this report, we will explore two cases: ‘Best Economic Returns’ case which prioritizes cost savings, and ‘Towards Net Zero’ case which maximizes solar energy use. Both are compared to a ‘Business as Usual’ case which accounts for energy charges from the grid and diesel generators. Battery storage replaces diesel generators in both cases.

The report finds that it is financially viable to adopt behind-the-meter (BtM) solar plus energy storage systems for both commercial and industrial LT consumers in Tamil Nadu. It offers attractive payback periods ranging from 3 to 9 years and a significant reduction in the discounted cost of electricity supply for 10-years. We saw savings of up to 45% over a 10-year period compared to the ‘Business as Usual’ case.

Drivers like ambitious government targets and frequent power outages create the need for reliable backup solutions, and regulatory mandates push customers to transition to renewable energy options coupled with batteries. Cost reductions in lithium-ion batteries and solar PV modules further make solar plus energy storage options more financially viable to adopt. Unfavorable tax rates and existing electricity subsidies pose significant barriers to widespread adoption.

Including battery energy storage in MNRE’s rooftop solar program in phase III shall fuel to higher adoption of solar plus energy storage system. Reduction in GST rates could lead to cost savings. Strategic reallocation of electricity subsidies towards renewables will incentivize investment. Forward-looking regulations must also be devised to enable seamless grid integration and optimize the grid services offered by solar plus energy storage systems.