- Comm. proposes max tariff cap of Rs. 66.53 per unit
- Senior engineer decries proposed tariffs
- FIT only practical option at present: NSO Chairman
The proposal by the Public Utilities Commission of Sri Lanka (PUCSL) to introduce a Feed-in Tariff (FIT) for Battery Energy Storage Systems (BESS) has come under scrutiny, with industry experts questioning whether the proposed tariff structure could result in unnecessary costs being passed on to electricity consumers.
The concerns follow the commission’s publication of its Renewable Energy Feed-in Tariff Review – July 2026, which proposes introducing FITs for rooftop solar systems integrated with BESS, standalone BESS, and power plants equipped with battery storage.
Under the proposal, rooftop solar projects integrated with BESS would receive FITs ranging from Rs. 41.56 to Rs. 66.53 per unit during the prioritised feed-in period (5.30 p.m. to 9.30 p.m.), depending on system size. Standalone BESS projects would receive tariffs ranging from Rs. 30.83 to Rs. 50.01 per unit, plus a charging component linked to the applicable daytime electricity tariff.
As learnt by The Sunday Morning, the commission has also proposed a maximum tariff cap of Rs. 66.53 per unit, noting that it may be revised depending on the uptake of battery storage systems.
However, a senior engineer attached to the National System Operator (NSO) argues that the proposed tariffs are significantly higher than prices already being achieved through competitive procurement.
Speaking on terms of anonymity, the engineer pointed to reports that a 10 MW BESS project tendered by the NSO had attracted bids of around Rs. 20 per unit, questioning the need for distribution-level battery storage to be procured under administratively determined feed-in tariffs of up to Rs. 66.53 per unit.
The source opined that both the Government’s policy direction and the Sri Lanka Electricity Act emphasised competitive procurement of electricity projects, making the proposed FIT mechanism inconsistent with those principles, questioning if any other country had adopted such measures.
While acknowledging that the PUCSL had the legal authority to determine FITs under Section 29(3) of the Sri Lanka Electricity Act, the source argued that introducing an entirely new category of FIT for battery storage should first receive policy approval from the Government, particularly if Sri Lanka was among the first countries to adopt such a framework.
They added that such a decision should be supported by comprehensive technical and economic studies rather than relying solely on the public consultation process.
Another concern raised relates to possible duplication of battery storage investments.
While the NSO is already procuring grid-scale BESS through competitive tenders to support system operations, the source warned that the proposed FIT would also incentivise distribution licensees and prosumers to install battery systems independently.
They questioned whether adequate planning mechanisms existed to ensure the country did not end up procuring more battery storage capacity than required through parallel procurement processes, ultimately increasing costs borne by electricity consumers.
Meanwhile, when contacted, NSO Chairman Dr. Pradeep Perera dismissed claims that engineers attached to the NSO had raised concerns over the proposed FIT, stating that the views were expressed by retired Ceylon Electricity Board (CEB) engineers and not current NSO engineers.
He maintained that battery energy storage integrated with renewable energy was the most suitable option for Sri Lanka, given the country’s heavy dependence on imported fossil fuels. “BESS enables renewable energy to function as firm energy, which is essential for a country like Sri Lanka,” he said.
Responding to concerns over how the batteries would be recharged, Dr. Perera said they would be charged using electricity generated from renewable energy sources. On the proposed FIT rates, he acknowledged that discussions were underway to reduce the tariffs proposed by the PUCSL, adding that the NSO was of the view that the rates should be brought closer to the cost of furnace oil generation.
Explaining the need for an FIT instead of competitive procurement, Dr. Perera said that the NSO’s preferred option remained competitive bidding. However, he noted that tender processes took considerable time, while the country was expected to require up to 450 MW of additional electricity due to anticipated El Niño conditions.
“Given the urgency of the requirement, introducing an FIT is the only practical option available at present,” he said.