New Delhi: ACME Solar Holdings Ltd plans to begin operating one gigawatt hour (GWh) of battery energy storage system (BESS) on a merchant basis from the fourth quarter of FY26, in what could be among India’s first large-scale merchant storage projects. The company said the initiative is expected to generate an annual EBITDA of around Rs 170 crore, assuming a price difference of Rs 5 per unit between peak-hour merchant sales and storage cost.
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Nikhil Dhingra, Chief Executive Officer (CEO) and Director, during the company’s Q2 FY26 investor call added that the new grid access rules notified by the Central Electricity Regulatory Commission (CERC) now allow battery storage systems to use existing connectivity infrastructure for merchant operations, enabling companies to “utilise BESS in their operational substations for additional revenue.”
He said ACME plans to leverage this rule to run merchant operations alongside its PPA-linked renewable projects by charging batteries using either solar power or grid power during non-peak hours and selling electricity during evening peaks.
Merchant battery storage refers to systems that store electricity during low-demand hours and sell it on power exchanges during high-demand periods, instead of supplying power under long-term contracts. The business model allows developers to take advantage of real-time price differences between peak and off-peak electricity markets.
ACME’s total portfolio has now reached 7,390 MW, including 13.5 GWh of BESS capacity and 5,180 MW of PPA-signed projects. During the quarter, the company placed orders for 2 GWh of BESS, taking its total orders to 5.1 GWh, which will be installed in phases starting Q4 FY26.
“Both our solar and BESS projects represent distinctive opportunities with strong strategic and financial merits,” Dhingra said. He noted that ACME’s projects were designed to deliver EBITDA-to-capex yields of 14–15 percent, with “strong counterparty demand anticipated to drive new PPA signings.”
“With recent commissioning, our operational portfolio now stands at around 2,918 MW, capable of delivering an annual steady state project-level EBITDA of Rs 2,025–2,075 crore,” said Dhingra.
During the quarter, ACME won 720 MW of new projects, including a 50 MW firm and dispatchable renewable energy (FDRE) project with Tata Power — its first PPA with a private discom — and a 450 MW SJVN project integrating 2.2 GWh of BESS for four-hour peak power supply.
“The 450 MW SJVN project will help meet the peak-hour deficit that most states continue to face,” Dhingra said, adding that strong demand from potential off-takers was already visible.
ACME has also commissioned a 10 MWh pilot BESS at one of its interstate transmission system (ISTS) plants to test multiple configurations. “We were able to improve round-trip efficiency by 4–5 percent because of these configurational adjustments,” said Manoj Kumar Upadhyay, Chairman and Managing Director. He described the pilot units as “golden containers” used to verify technical and performance parameters before full-scale deployment.
“These configurations helped us improve not only the long-term discharge but also short-term discharge, which can support grid ancillary services,” Upadhyay said.
The management noted that recent government measures have strengthened renewable project viability. These include a reduction in GST rate on solar and wind equipment from 12 percent to 5 percent, the replacement of Renewable Purchase Obligation (RPO) with the broader Renewable Consumption Obligation (RCO) that targets 43 percent renewable energy use by 2030, and the Supreme Court’s directive asking state regulators to clear Rs 1.5 lakh crore of regulatory assets within four years.
“These changes will positively impact renewable energy demand in alignment with India’s 2030 targets,” Dhingra said.
On pending power purchase agreements (PPAs) across India, Dhingra said there was “increased urgency” from the government for states to clear existing PPAs before new bids are issued.
“We are not seeing in any of our PPAs that there is no demand from any state,” he said, adding that ACME’s tariffs were “attractive” across hybrid and FDRE projects. “The directive is not to cancel projects that have demand. So we remain confident,” he added.
He clarified that one NTPC-linked pooling project was cancelled after the scheme was withdrawn by the government, but a 2.52 GW solar project with SJVN remained under active consideration with several states, including Punjab.
ACME reported that both CRISIL and ICRA upgraded its rating to AA- this quarter, enabling it to refinance operational debt at lower rates. The company achieved a 75-basis point reduction in interest costs on Rs 2,080 crore of debt, and refinanced Rs 1,100 crore at 8.4 percent, expected to fall to around 8 percent.
“All of our refinanced loans are for a 20-year tenure,” Dhingra said. “We maintain a mix of fixed and floating instruments to capture the benefit of rate cycles.”
On grid bottlenecks, Dhingra said ACME’s transmission-related delays were “not more than a quarter” from the committed PPA timelines. The 300 MW Sikar project is currently operating under short-term open access due to a delay in the Narela K3 line, expected to be commissioned by December.
“We assess connectivity timelines every fortnight,” he said, noting that ACME’s flexible connectivity allocations across projects help mitigate delays.
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ACME reported that its new Sikar solar plant achieved CUFs above 30 percent in June using domestic modules, while its 78 MW wind capacity operated at around P75 levels in early months. “Our plant and grid availability remained above 99 percent,” Dhingra said.
