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The Economics of Power Backup in India: Payback, ROI & Real Savings

The Economics of Power Backup in India: Payback, ROI & Real Savings

With rising power outages, increasing electricity tariffs, and growing interest in solar energy, many Indian homeowners are exploring modern battery energy storage systems (BESS). But are they worth the investment? Here's a detailed breakdown of costs, returns, and the real savings of going solar + storage.

1. What Does a Power Backup System Cost in India?

A typical home energy storage setup for an average household includes:

Total: ₹2.5–₹4.5 lakh, depending on system size and brand.

Adding a solar array (2–5 kWp) can cost an additional ₹1.5–₹3 lakh, enabling partial or full off-grid capability.

2. Annual Savings Breakdown

Let's assume you offset a mix of grid energy and backup generator use:

| Source Replaced | Monthly Savings | Annual Savings | | --------------------------- | --------------- | --------------- | | Grid Tariff Offset (15–25%) | ₹1,000–₹2,000 | ₹12,000–₹24,000 | | Generator/DG Set | ₹500–₹800 | ₹6,000–₹9,600 | | Net Solar Export (Grid) | ₹400–₹600 | ₹4,800–₹7,200 |

Total Annual Savings: ₹22,800 – ₹40,800

3. Payback Period Calculation

With a system cost of ₹3–₹5 lakh and annual savings of ₹25K–₹40K:

4. What About Battery Life?

5. Avoided Costs = Hidden Returns

Traditional inverter-battery systems (lead-acid) require battery replacements every 3–5 years (~₹20–25K per cycle). These recurring expenses can be avoided with modern lithium-based systems.

Additional benefits include:

Conclusion: An Investment That Pays You Back

Modern power backup systems in India offer more than just outage protection. With improving technology, falling costs, and smart solar integration, they provide:

The economics add up — especially if you're planning for the long term.

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