New Delhi, Oct 12 (IANS) India’s Battery Energy Storage System (BESS) sector is projected to register a compound annual growth rate of 91 per cent between FY26 and FY32, according to a report.
A report by Nuwama said that the expansion reflects critical infrastructure cycle designed to support renewable integration, grid balancing, and round-the-clock power requirements across the country.
Cumulative capacity will surge from 6.3 GWh to 302 GWh over same period with annual additions climbing from 5.7 GWh in FY26 to 56 GWh by FY32E, it added.
The Central Electricity Authority estimates national BESS demand at 236 GWh by FY32 and 1,840 GWh by 2047.
We estimate annual BESS additions to rise from 5.7 GWh in FY26 to 56 GWh by FY32E, taking cumulative capacity from 6.3 GWh to 302 GWh (91 per cent CAGR) over FY26-32E, the report said.
With 89 per cent of current requirements met through imports, falling battery costs, alongside likely ALMM-like framework, could accelerate adoption, localisation and domestic capacity growth.
Although Li-ion occupies 98 per cent of BESS market, sodium-ion technology and China+1 themes are opportunity for India, the report said.
Moreover, manufacturing economics reveal distinct margins across end-markets with commercial, industrial and retail segments yielding spreads of $18 to 23 per kilowatt-hour, corresponding to EBITDA margins of 17 to 20 per cent.
The report also highlighted that while returns for integrated BESS facility yield modest internal rate of return of 12 per cent, domestic production maintains distinct cost advantage through capital expenditure of $80 million per gigawatt-hour, coupled with production-linked incentive support of Rs 181 billion for 50 GWh and competitive labour expenses.
The report believes that with policy support, localisation and scale, integrated BESS could open up export-led growth.
Financially, BESS integration is estimated to contribute 17 to 60 per cent to company revenues by FY28.
Premier presents opportunity of Rs 103 billion, representing 60 per cent of its projected FY28 revenue, while Vikram is positioned for 54 per cent revenue uplift.
Despite early battery ambitions and potential BESS addition of 17-60 per cent to FY28E revenue, most listed solar or BESS players’ earnings are yet to capture meaningful BESS contribution, the report stated.
–IANS
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