By The Pulseline News Desk
The Government is considering tax concessions for domestic rooftop solar users to encourage the adoption of battery storage systems, as Sri Lanka seeks to expand renewable energy generation while ensuring a stable and affordable electricity supply.
President Anura Kumara Dissanayake said the proposed concessions would address concerns over taxes imposed on smaller battery storage systems, which currently make energy storage more expensive for domestic users.
Addressing the Sri Lanka Economic and Investment Summit on Monday (12), the President said the Government was exploring ways to extend existing concessions for larger battery storage systems to smaller installations used by households and other rooftop solar operators.
He explained that concessions were currently available for battery storage systems with capacities exceeding one megawatt, while smaller systems remained subject to taxation.
The Government was considering extending these benefits to smaller battery systems, including those in the 200–500 kilowatt range, he said.
However, a technical challenge remained in distinguishing batteries specifically designed to store solar-generated electricity from other types of batteries. The President expressed confidence that the issue could be resolved, allowing the Government to move forward with the proposed concessions.
Solar expansion gathers pace
Rejecting claims that the Government was opposed to renewable energy, Dissanayake pointed to the expansion of solar power generation since his administration took office.
According to the President, Sri Lanka had approximately 1,400 megawatts of installed solar power capacity when the Government assumed office, with a further 1,500 megawatts added over the past two years.
Agreements have also been signed for an additional 1,100 megawatts of solar power capacity, which is expected to be completed next year.
The President said the Government expected to have added approximately 2,600 megawatts of solar power capacity by next year, underscoring its commitment to expanding renewable energy.
However, he acknowledged that the country’s limited land resources posed challenges to the expansion of ground-mounted solar projects. Generating one megawatt of solar power requires approximately three acres of land, making alternative approaches increasingly important.
Floating solar projects in focus
Against this backdrop, the Government has begun exploring floating solar projects that use reservoirs and other water bodies to generate electricity without requiring large areas of land.
The President cited the five-megawatt floating solar project at Ibbankatuwa, which occupies approximately 10 acres, as an example of the approach.
Plans are also being developed for a floating solar project at Randenigala through a public-private partnership (PPP).
Moragahakanda, Samanalawewa and Chandrika Wewa have been identified as potential locations for similar projects, he said.
The initiative is expected to provide an alternative means of expanding solar generation while addressing land constraints that could otherwise limit the development of renewable energy infrastructure.
Battery storage key to energy security
The Government is also prioritising battery storage to address fluctuations in renewable energy generation and make better use of electricity produced during periods of high solar output.
Dissanayake explained that solar power generation generally peaks during the afternoon, sometimes exceeding the electricity system’s capacity to accommodate the additional supply.
Following recommendations from energy experts, the Government is focusing on storing surplus solar-generated electricity during the day for use at night, when solar generation declines and electricity demand must be met through other sources.
The President said tenders had already been called for 160 battery storage units, with 13 expected to be completed by the end of November.
Tenders had also been called for a further 250 battery units. He added that the latest procurement process had resulted in a price reduction of approximately Rs. 10 compared with the earlier tender.
The Government was also considering extending battery storage opportunities to existing operators, he said.
The expansion of storage capacity is expected to help the electricity system accommodate a greater share of intermittent renewable energy while reducing the need to rely on conventional power generation during periods when solar output is unavailable.
Renewable energy share reaches 75% on some days
Highlighting Sri Lanka’s progress in renewable energy generation, Dissanayake said renewable sources currently accounted for approximately 69% of the country’s electricity generation, with the share rising to between 70% and 75% on certain days, depending on prevailing conditions.
He also revealed that Sri Lanka had not used diesel for electricity generation during the four consecutive days preceding his remarks, describing it as a significant achievement in the country’s transition towards renewable energy.
The Government’s challenge, however, extends beyond increasing renewable energy capacity. It must also ensure that fluctuations in generation do not compromise the reliability of the electricity supply or increase costs for consumers.
Dissanayake reiterated that the Government’s primary objectives were to ensure an uninterrupted electricity supply and provide electricity at an affordable cost.
The proposed tax concessions for smaller battery storage systems, alongside investments in utility-scale storage and floating solar projects, form part of the broader effort to achieve these objectives.
Whether the planned measures translate into wider household adoption of battery storage will depend partly on the Government’s ability to resolve the technical issues surrounding tax concessions and make storage systems more affordable.
For Sri Lanka, the next phase of the renewable energy transition will therefore depend not only on adding solar generation capacity, but also on developing the infrastructure needed to store and deliver that electricity when it is required.
Leave a comment