14-05-2025
Tariff in solar+ESS auction 5.8% lower than previous SECI tender
New Delhi: In a significant development for India's renewable energy sector, a solar project integrated with energy storage has recorded a tariff of ₹3.32 per unit—5.8 per cent lower than the rate discovered in a similar tender by SECI in December 2024, according to a report by JMK Research.
The tariff was discovered in a reverse auction conducted by SJVN Ltd for setting up 1200 MW of solar capacity co-located with 600 MW/2400 MWh of energy storage, offering four hours of backup.
The latest price matches the tariffs seen in recent wind-solar hybrid (WSH) auctions and falls well below those in standalone wind bids, JMK Research said.
The report highlighted the growing shift toward integrating energy storage with solar generation. A February 2025 notification by the Ministry of Power mandates that all upcoming solar tenders include co-located ESS of at least two hours' duration, equivalent to 10 per cent of the project's installed capacity.
These Solar + ESS projects are intended primarily for energy shifting, aimed at balancing the gap between peak solar generation and peak power demand.
Though most utility-scale tenders remain technology-agnostic, the requirement for solar co-location and a 24-month commissioning deadline is likely to favour
battery energy storage systems
(BESS), the report said.
The ongoing decline in battery prices has played a central role in bringing down project tariffs. Since June 2024, global prices for Lithium Iron Phosphate (LFP) cells have dropped by around 6 per cent as of April 2025.
According to Bloomberg estimates cited in the report, battery prices could decline further to about USD 112 per kWh by the end of 2025, potentially driving future Solar + ESS tariffs even lower.
However, the upcoming implementation of the Approved List of Cell Manufacturers (ALCM) policy from June 2026 may temporarily raise tariffs until Indian cell manufacturing capacities scale up.
As the share of variable renewable energy (VRE) grows, Solar + ESS configurations are expected to become standard in future solar projects. This shift is seen as critical for India to meet its target of 47.2 GW of battery energy storage by 2031-32 and to integrate 500 GW of renewable energy into the national grid by 2030, the report added.
