Battery energy storage sector under stress as cell prices surge

INDIA’S BATTERY ENERGY storage system (BESS) sector is facing a sharp cost reset due to the combined effect of a falling rupee, higher raw material prices and changes in China’s export policy.

- SAURAV ANAND

Effective cell costs have flared up by an estimated 25-30% over levels assumed in bids placed in FY24, according to industry sources.The pressure comes at a time when India’s energy storage deployment is expected to accelerate sharply. As per the National Electricity Plan, cumulative storage requirements are projected to rise from over 82 GWh in FY27 to more than 411 GWh by FY32, making cost stability critical for execution.

India has tendered out 83 gigawatt-hours (GWh) of battery storage capacity since 2021,but needs to step up the pace to meet its 2032 need for 236 GWh of storage, the India Energy Storage Alliance said.

Of the 83 GWh tendered, nearly 36 GWh of projects have been awarded and 15.4 GWh are in the open tender stage, while 18 GWh are being built and projects for about 8 GWh have been cancelled.

Between mid-2025 and early 2026, the Chinese yuan weakened by around 3% against the dollar, while the rupee fell by about 9%.

These currency moves have added an estimated 11-12% to landed cell prices for Indian buyers. At the same time, raw material costs have rebounded, with electrolyte prices for lithium iron phosphate cells almost doubling in six-seven months and lithium carbonate prices rising over 10 % from mid-2025 lows.