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6. Now that we have mapped out the total addressable market from years 2021 through 2025, let us look at micro-scale project economics. How does a battery storage system work for one consumer? For this question, let us look at the economics of battery storage solutions from a rooftop solar perspective. Suppose a consumer, Ms. Anu Joshy, is deciding whether to install a rooftop solar system with Li-ion batteries at her bungalow in Ooty, Tamil Nadu. She plans to start operating the system on New Years on January 1, 2021 but will make all the payments and complete the commissioning in 2020. So, 2021 will be the first period of system operation and all its cash-flows need to be discounted to the present value in 2020. Questions (answers max 50 words each): a. Should she go ahead and do the project with only solar? Do a present value analysis to answer this question. b. Should she add the battery system? Also do a present value analysis to answer this question. c. Additionally, what is the IRR for her on this project? With solar? With solar and batteries? d. If we remove the income tax incentive from the equation, how would your numbers and advice to Ms. Joshy change? Use the assumptions laid out below to model out your answers (while we solved the earlier question in USD, please solve this one in Indian rupees):

Capex of rooftop solar system (Lakhs Rs)	5.50
First-year solar generation (kWh)	6000
Annual reduction of solar system performance	0.50%
Annual electricity consumption at the Joshy household (kWh)	9000
Increase in annual consumption	2.50%
Project life (years)	30
Inverter replacement cost in the 15th year (Thousand Rupees)	37.50
Income tax incentive for the solar system (fully utilizable by Ms Joshy in 2021 for both solar and battery); in subsequent years, she can utilize the tax credit fully in any year a replacement is done for that year)	30%
Retail price of electricity in Tamil Nadu (Rupees per kWh)	10.00
Annual increase in retail electricity prices	3%
Discount rate	7%
Battery capex, 2020	Rs 1.8 lakhs
Battery replacement capex, 2030	Rs 90 thousand
Battery replacement capex, 2040	Rs 50 thousand

Please also refer to the critical information below before creating your model. Given that solar is an intermittent source of electricity, the following table below represents her annual electricity usage pattern by month. In the case where she does not install batteries, she loses excess generation as there is no net-metering option available to her. Assume this proportion of monthly usage will continue to remain constant in all future years as overall annual consumption rises. Finally, in the case she installs batteries, the system is perfectly sized so that she does not lose any excess generation.

	Monthly consumption	Monthly solar production
Jan	1019	126
Feb	960	212
Mar	1000	376
Apr	1050	629
May	532	873
Jun	473	963
Jul	430	1013
Aug	318	788
Sep	461	509
Oct	600	276
Nov	1110	142
Dec	1047	93
Total	9000	6000

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