Merchant battery energy storage systems (BESS) in India have become profitable for the first time in 2024, thanks to a significant drop in battery costs and higher revenues from volatile power markets. Battery costs have fallen by 80% to Rs1.7m/MWh, while potential revenues have surged fivefold to Rs2.4m/MWh in 2025.

The increased price volatility in power markets has led to peak prices nearing Rs10 per kWh and midday prices dropping by 20% in summer, with occasional near-zero prices. Ember’s report predicts merchant BESS investments could yield up to 17% internal rate of return from 2025 investments by participating in the day-ahead market alone.

By participating in the ancillary services market, merchant BESS in India can boost revenue and further enhance returns. As India surpasses 50% of its installed electricity capacity from non-fossil fuel sources in 2025, the investment case for battery storage strengthens, aligning with the country’s clean energy transition goals.

India experienced the fastest growth in renewable power output in the first half of 2025, with coal-fired generation decreasing by nearly 3% compared to 2022. Despite these advancements, fossil fuels still contributed to over two-thirds of the total power generation increase in 2024.

Read more at Yahoo Finance: Merchant BESS in India becomes profitable: Ember report