Under India’s net metering framework, a unit of solar exported at noon is credited one-to-one against a unit consumed in the evening. Electricity distribution companies (DISCOMs) therefore have to credit cheap daytime exports against power they may have to buy at a far higher price.
Because households can bank unlimited surplus solar and withdraw it at any time, they have no financial reason to add a battery. Ember modelled a 3 kW rooftop system for a household using 350 units a month. Solar alone costs INR 87,000 after the INR 78,000 PM Surya Ghar subsidy and pays back in 3.3 years. Adding a 5 kWh battery cuts daytime exports by 85–90% – around 1,600–1,800 units a year shifted to the evening – but raises the overall system cost and stretches payback period to nine years. The grid gains, the consumer does not, building a case for financial incentive to the households.
For example, a 50% subsidy on battery capital costs, would bring payback for a solar-plus-battery system down to 6.3 years. Ember proposes delivering it through the next tranche of PM Surya Ghar: Muft Bijli Yojana. Subsidising hybrid systems for even half of the current scheme’s 10 million target would create 15–25 GWh of distributed storage. States could follow Tamil Nadu and Bihar in topping up the central subsidy, but direct that top-up at the battery cost gap rather than solar alone.
Batteries installed now would also prepare households for reforms that might be applicable in the future. The analysis considers two such scenarios, in the first one, it finds that with a 40% cap on banked exports, a subsidised hybrid rooftop solar system would pay back in 6.5 years. In the second scenario, if banked solar could not be withdrawn during the 6–10 pm peak and a 20% peak surcharge applied, payback would be 5.7 years after including subsidies. Notably, home batteries would also enable consumers to participate in the future demand response programmes.
Kerala, Maharashtra and Uttar Pradesh have begun exploring rooftop solar-plus-battery systems, and the Central Electricity Authority has suggested DISCOMs could mandate two hours of storage alongside rooftop installations. Ember’s analysis argues that a targeted subsidy would address the upfront cost barrier so that policy and regulatory changes can be made without stalling the rooftop boom.
