- India aims to increase its battery energy storage capacity tenfold by 2026, reaching approximately 5 GWh, as major projects transition from tendering to execution.
- Falling tariffs, strong policy support, and flagship projects such as Adani’s 1,123 MW/3,530 MWh BESS installation are transforming India’s energy storage sector.
India’s energy storage sector is entering a transformative phase. In particular, 2026 will bring several significant projects that have been in the pipeline for the past two years online. As a result, this year marks a critical turning point for the industry. Developers must deliver projects within 18 to 24 months. Meanwhile, in 2025, the sector focused mainly on tendering activities. During that period, developers issued 69 tenders. Consequently, these tenders totalled 102 GWh, nearly matching the total issued between 2018 and 2024. Projects under execution have progressed by 84%, bringing the total to 244 GWh. Thus, the stage is set for large-scale commissioning in 2026.
IESA emphasised that the shift from awarding contracts to executing projects represents a significant inflexion point. However, the industry faces challenges. Debmalya Sen, IESA’s president, warned that financing and project performance could create hurdles. Furthermore, he noted that developers must monitor outcomes closely to ensure alignment with prior commitments. Additionally, projects approved at low tariff levels will require careful funding management.
Tariffs already show sharp declines. For instance, two-hour energy storage system tariffs dropped from INR 2.21 lakh per MW per month at the start of 2025 to INR 1.48 lakh per MW per month by year-end in an APTRANSCO tender. Moreover, solar-plus-four-hour BESS projects will likely see aggressive pricing. In fact, tariffs may fall to INR 2.70–2.76 per unit as new bidders join the market.
High-profile projects will dominate 2026. Specifically, Rajasthan will float a tender in January for India’s largest solar-plus-four-hour BESS project at Pugal Solar Park. Then, in March, Adani will commission a 1,123 MW/3,530 MWh battery storage project in Gujarat. This project ranks among the world’s largest single-location BESS installations. Vinayak Walimbe, Managing Director of Customised Energy Solutions, said, “The transition from tendering to execution represents a watershed moment for India’s energy storage sector.”
Policy support continues to strengthen the sector. IESA highlighted a second tranche of Viability Gap Funding worth INR 5,400 crore for 30 GWh of standalone BESS projects. In addition, it includes a 20 per cent domestic value addition requirement. States extended interstate transmission system charge waivers until 2028 for pumped storage and solar-plus-BESS projects. Furthermore, Rajasthan and Bihar announced ambitious targets. Consequently, the pumped storage hydro segment is expected to grow from 50 GWh in 2024 to 132 GWh in 2026. JSW and UPPCL signed a 1.5 GW/12 GWh pumped hydro PPA at INR 77.2 lakh per MW per year in Uttar Pradesh.