India’s battery energy storage market is poised for a significant expansion in 2026, with total installed capacity expected to surge from around 507 MWh in 2025 to about 5 GWh, nearly a tenfold increase, according to a recent report by the India Energy Storage Alliance (IESA).
This projected growth reflects a pivotal shift in the sector from tendering activity to execution and commissioning of projects. In 2025, India saw an unprecedented wave of energy storage tenders, 69 tenders amounting to 102 GWh which is roughly equivalent to all tenders issued between 2018 and 2024 combined.
The IESA analysis highlights that many of the awards made since mid-2023 are now advancing toward construction and are expected to become operational in 2026, marking a key transition from planning to delivery. Around 60 GWh of projects are entering the implementation phase, supported by strong developer interest and a backlog of capacity under execution.
Policy support and market dynamics have also helped catalyze this surge. Competitive bidding in 2025 saw a sharp decline in tariffs for both standalone battery energy storage systems (BESS) and solar-plus-storage projects, attracting new participants and bolstering market competitiveness. Government mechanisms such as Viability Gap Funding (VGF) worth ₹5,400 crore and extended transmission charge waivers have further supported the sector’s momentum, though financing especially for lower-tariff projects remains a key challenge.
High-profile installations expected to progress this year include some of the world’s largest single-location BESS projects, such as a 1,126 MW/3,530 MWh system in Gujarat, along with major solar-plus-BESS initiatives in Rajasthan.
Industry leaders view 2026 as a watershed year for India’s energy storage landscape, as the sector proves its ability to move from announcements and awards toward actual deployment and grid integration. Enhanced storage capacity is also seen as critical to improving grid reliability and supporting the nation’s broader renewable energy ambitions.
